More and more industrial companies in Russia are reducing their working weeks, sending employees on unpaid leave, or making layoffs, all in an attempt to cut costs. The problems affect various sectors – from rail transport and the automotive industry, to metallurgy, diamond mining, and cement production.
Russian Railways have asked their headquarters employees to take three additional days off per month, at their own expense, in addition to legal holidays, reports Reuters. In the automotive industry, manufacturers GAZ, VAZ and KAMAZ have switched to a four-day working week, and Cemros, the largest cement producer in Russia, implemented the same measure in October. GAZ has since returned to the normal schedule, but the other manufacturers maintain the reduced scheme.
The state-owned company Alrosa, Russia’s largest diamond producer, has cut salaries by 10% for employees outside the mining sector and has suspended activity at less profitable mines. Company representatives told Reuters they are trying to avoid layoffs, without specifying how many employees were affected.
The Sveza Group, a plywood manufacturer, has closed its factory in Tyumen due to low demand, leaving over 300 people jobless. In the metallurgical sector, industry sources have confirmed a “discreet reduction of staff,” especially among auxiliary employees.
Economists quoted by Reuters attribute the current pressure in the industry to several factors: the high key interest rate, the strengthening of the ruble, the decrease in domestic demand, the reduction of exports due to sanctions, and cheap imports from China. All these elements highlight, according to analysts, the vulnerabilities of the Russian economy in the context of the prolonged war in Ukraine.
