Russia’s state corporation Gazprom and the world’s largest gas producer, is announcing sharp job cuts, reports the Russian portal 47news.ru. The Russian company’s headquarters in St. Petersburg will be reduced by almost half and more than 1,500 employees will be laid off.
According to 47news.ru, Gazprom’s deputy chairman of the board, Yelena Ilyukhina, had already requested the company’s CEO, Alexey Miller, to reduce the number of employees at the company’s headquarters in late December. A company spokesman confirmed these arrangements in an interview with AFP.
The headquarters currently employs 4,100 people, and 2,500 are to keep their jobs. It emphasized that over the past 20 years, the number of employees in the company’s administration has increased many times over, and the salary fund currently amounts to 50 billion rubles per year (€500 million). In total, the company had 498,000 employees in 2023 and planned to reduce this to 400,000 by 2024.
The company also notes that it can employ “automation and digitization” for many of the jobs, such as accounting and planning, which echoes a trend increasingly seen across the West.
One of the reasons for Gazprom’s decisions is its huge financial losses due to Western sanctions, which have sought to sever Russian energy supplies from Western countries. In its report for 2023, the company reported a loss of 629 billion rubles, while a year earlier the company had made a profit of 1.23 trillion rubles. This was the first loss in 25 years, but the company’s revenues have fallen significantly over the past three years. The financial problems coincided with the blowing up of the Nord Stream gas pipeline, a significant drop in gas exports, and the end of gas transit through Ukraine from Jan. 1, 2025. These are also the effects of new sanctions imposed by the outgoing U.S. administration on Gazprom-Neft.
Ilyuchina wrote in a company letter that “the challenges facing Gazprom Group” require, among other things, faster decision-making, eliminating duplicate functions of central office employees, and reducing bureaucracy. She also mentioned the need to increase the focus on the results of employees involved in the implementation of key processes for Gazprom Group, as well as “optimization of costs at all levels of management and production processes.”
