The state-run energy firm could lay off 1,600 people from its St. Petersburg headquarters as it looks to save on costs
Russian energy giant Gazprom is considering mass layoffs at its St. Petersburg headquarters, according to media reports. The proposed move comes after the state-controlled energy group’s first annual losses in 25 years.
Gazprom spokesman Sergey Kupriyanov on Monday confirmed earlier reports of the plans by 47news.ru to Forbes and TASS news agency, following the publication of a letter penned by Deputy Chairman Elena Ilyukhina. Addressed to CEO Alexey Miller, the document proposed cutting the number of employees in administration from 4,100 to 2,500.
Following the escalation of the Ukraine conflict in 2022, Gazprom’s exports to the EU, previously its largest market, were significantly reduced due to sanctions, the September 2022 sabotage of the Nord Stream pipeline and, most recently, Ukraine’s refusal to transit gas through its territory.
“Yes, the document is genuine. We do not plan to comment on it,” Kupriyanov said, as quoted by Forbes.
In her letter, dated December 23, Ilyukhina stated that challenges faced by Gazprom required a reduction of red tape within the company, a streamlining of decision-making processes, the elimination of positions with overlapping functions, and the encouragement of employees to focus on results.
Gazprom pays 50 billion roubles ($485 million) in wages annually to staff in its central office and at a branch in St. Petersburg, the letter said, suggesting that the number should be reduced.
The latest available data suggests that the Gazprom Group employs more than 498,000 people, which accounts for 0.7% of total employment across Russia.
In 2023, the corporation posted its first annual loss, of $6.7 billion, since 1999, due to dwindling gas exports and Western sanctions.
The company has managed to reorient its energy trade towards Asia, with China emerging as Gazprom’s “key” foreign buyer, according to CEO Alexey Miller.
Gazprom has not yet released its full financial results for 2024.
