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Global consultancies quit Russia

Four top global consultancies, all with big IT practices, have quit Russia.

PwC on Sunday decided that Russia’s invasion of Ukraine means it “should not have a member firm in Russia and consequently PwC Russia will leave the network.”

KPMG also chose Sunday for its announcement, which it argued was necessary because “We believe we have a responsibility, along with other global businesses, to respond to the Russian government’s ongoing military attack on Ukraine.”

The firm’s Russia and Belarus outposts will leave the KPMG network. “KPMG has over 4,500 people in Russia and Belarus, and ending our working relationship with them, many of whom have been a part of KPMG for many decades, is incredibly difficult,” the firm’s statement reads, adding “This decision is not about them – it is a consequence of the actions of the Russian government. We are a purpose-led and values-driven organization that believes in doing the right thing.”

Staff will be offered “transitional support”.

The two consultancies’ decisions to quit Russia follow similar moves last week by Accenture (on March 3) and DXC (March 4th).

The four firms collectively employed 14,500 people in Russia and Belarus.

Quitting Russia is not only a blow to those staff. Top-tier IT vendors routinely turn to global consultancies when engaging with businesses that have complex challenges to address. The likes of Microsoft, SAP, and Oracle often run joint projects with big consultancies. With those vendors and their delivery partners now all backing out of Russia, local users will be combing through the fine print of their contracts wondering whether they’ll still be able to get help.

And they just might be OK. The announcements from PwC and KPMG both mention their local presences leaving “the network” rather than shutting down completely. That’s noteworthy because, as PwC’s post points out, each nation’s PwC is a separate legal entity.

That raises the prospect that the firms’ Russian presences could carry on independently – if their managers can manage to keep them afloat. If PwC’s Russian clients contracted with PwC Russia, contracts and cash flow will presumably persist and so will the firm’s capabilities. It’s conceivable the Kremlin could subsidize the remaining rumps of the four consultancies under schemes announced over the weekend.

Even if the remnants of the consultancies remain afloat, they won’t get the same access to vendors that makes relationships with global consultancies valuable. Projects that have hit trouble will struggle. But in Putin’s Russia, merely complaining about that will be dangerous – which is why the consultancies have left. ®