Russia’s Gazprom Might Reduce 40% of HQ Employees As Battle Takes Its Toll

• Russia’s state-owned fuel large is mulling a sweeping minimize to its managing employees in St. Petersburg.
• A letter from Gazprom’s board to its CEO instructed layoffs of 40% for its headquarters amid “challenges.”
• The letter mentioned wages amongst managers had risen to almost $500 million a 12 months.

Russian power large Gazprom is contemplating a 40% minimize to its headquarters employees after posting its first loss in 24 years, in response to a letter from considered one of its board members to the agency’s CEO.

The letter, first reported by St. Petersburg-based outlet 47News on Monday, proposed that the central workplace head depend be decreased from 4,100 to 2,500 folks. It was dated December 23, 2024.

A Gazprom spokesperson confirmed the letter’s authenticity with Agence France Presse and the state media outlet TASS.

Within the proposal, Elena Ilyukhina, the board’s deputy chairperson, wrote that wages for Gazprom managers had risen a number of instances within the final 20 years to about $486.5 million a 12 months.

“The challenges dealing with the Gazprom group require a discount within the time required for making ready and taking choices,” she wrote to CEO Alexei Miller.

Ilyukhina added that the corporate might as a substitute depend on “automation and digitalization” for roles like accounting and planning.

47News wrote that Ilyukhina additionally estimated a 40% minimize would align Gazprom’s management-to-employee ratio with that of Rosatom, a state-owned nuclear power agency.

Gazprom mentioned in June 2024 that it had 498,000 staff for 2023. Compared, Rosatom’s director common instructed Russian chief Vladimir Putin in October that his firm deliberate to have about 400,000 staff in 2024.

Ilyukhina added that some cash saved within the proposed job cuts could possibly be diverted to providing new efficiency bonuses for remaining staff.

Gazprom Group, which is usually owned by the Russian state, posted its first annual loss in 24 years in Might as wartime Western sanctions pushed its European clients to sever ties with Russian power.

The corporate introduced a internet lack of 629 billion rubles, value about $6.84 billion on the time, for the 12 months 2023. It final suffered a internet loss in 1999.

The fuel producer has continued to face headwinds, with its flagship firm asserting a $3.2 billion loss for the nine-month interval ending in September 2024.

It is unclear if Miller has accepted the layoffs instructed by Ilyukhina, and TASS reported that the corporate declined to remark past confirming that the letter is actual.

Gazprom’s press service didn’t reply to a request for remark despatched exterior common enterprise hours by Enterprise Insider.

Russia had for years been a serious provider of pure fuel to the European Union till Moscow’s invasion of Ukraine prompted many of the area to begin weaning itself off Russian power. The transition has taken years, with the EU whittling down Russia’s share of fuel imports from 40% in 2021 to eight% in 2023.

A lot of the hole has been stuffed by American fuel provides, with US fuel imports to the EU leaping from 18.9 billion cubic meters in 2021 to 56.2 billion cubic meters in 2023.

Extra not too long ago, Kyiv allowed the expiration of a pre-war contract to pipe Russian fuel to Western clients similar to Austria. Ukraine declined to resume the contract in early January.