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At the start of the war, Siemens suspended all new business and international deliveries in Russia and Belarus. Now, the German manufacturing giant says it will exit the Russian market entirely.
The company announced on Thursday that it has “initiated procedures to terminate its industrial operations and all industrial business activities” in accordance with regulatory requirements and international sanctions.
He called the decision a direct consequence of Russia’s war in Ukraine, saying international sanctions “as well as current and potential countermeasures” are impacting his business – particularly railway service and maintenance – in Russia.
The Munich-based multinational conglomerate is one of Europe’s largest industrial manufacturing companies, with divisions spanning energy, healthcare, infrastructure and other sectors.
It has about 3,000 employees in Russia, which contributes about 1% of the company’s annual revenue, according to Reuters. Most of its business now involves high-speed train services.
Roland Busch, chairman and CEO of Siemens AG, said in a statement that the withdrawal was not an easy decision to make, especially as the company has been operating in the Russian market for nearly 170 years. Siemens first arrived in Russia in 1851 to deliver devices for the telegraph line connecting Moscow and St. Petersburg.
“We are evaluating the impact on our people and will continue to support them as best we can,” added Busch. “At the same time, we provide humanitarian assistance to our colleagues and the people of Ukraine and support the international community in the call for peace.”
Siemens also released its second-quarter financial results on Thursday, revealing that it faced €600 million in charges and losses as sanctions on Russia crippled its mobility business, as CNBC explains. Its net profit halved to 1.21 billion euros (or $1.27 billion) in the first three months of the year, falling short of analysts’ forecasts.
Busch predicted further financial consequences related to the liquidation of Siemens legal entities, revaluation of financial assets and restructuring costs.
“From today’s perspective, we anticipate more potential risks to net income in the triple-digit million range, although we cannot set an exact timeframe,” he said, according to Reuters.
Siemens is among the many foreign and international companies that have distanced themselves from Russia following the invasion of Ukraine in late February. Nearly 1,000 companies have scaled back operations in Russia to some extent, according to researchers at the Yale School of Management.
This story originally appeared on morning edition live blog.