At the start of the war, Siemens put all new business and international deliveries in Russia and Belarus on hold. Now the German manufacturing giant says it will exit the Russian market entirely.
The company announced Thursday that it "has started proceedings to wind down its industrial operations and all industrial business activities" in line with regulatory requirements and international sanctions.
It called the decision a direct consequence of Russia's war in Ukraine, saying that international sanctions "as well as current and potential countermeasures" are impacting its business — particularly rail 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 there now involves service work on high-speed trains.
Roland Busch, president and CEO of Siemens AG, said in a statement that the pullout was not an easy decision to make, especially because the company has been active 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 we will continue to support them to the best of our abilities," Busch added. "At the same time, we provide humanitarian assistance to our colleagues and the people of Ukraine and stand with the international community in calling for peace."
Siemens also released its second-quarter financial results on Thursday, revealing that it faced 600 million euros in charges and impairments as sanctions on Russia hampered its mobility business, as CNBC explains. Its net income 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 fallout related to the winding down of Siemens' legal entities, revaluation of financial assets and restructuring costs.
"From today's perspective, we foresee further potential risks for net income in the low- to mid-triple-digit million range, although we can't define an exact time frame," he said, according to Reuters.
Siemens is among the many foreign and international firms to distance themselves from Russia following its invasion of Ukraine in late February. Nearly 1,000 companies have curtailed operations in Russia to some degree, according to researchers from the Yale School of Management.
This story originally appeared in the Morning Edition live blog.