Gazprom's survival strategy: Mass layoffs amid sanctions crisis
Russian media have published the content of a letter sent to the head of Gazprom by the giant's vice president, Elena Ilyukhina. She calls for mass layoffs at the company's headquarters in the letter. The document's authenticity was confirmed in a conversation with "Forbes." This is a result of the dire situation of the conglomerate following the Ukraine invasion.
In a letter to the head of the conglomerate, oligarch Alexey Miller, the vice president of Gazprom's management board, appealed to reduce employment at the headquarters from 4,100 to 2,500. She noted that the number of employees in the company's administration has increased significantly over the past twenty years. Today, the salary fund consumes 50 billion rubles annually.
As Ilyukhina admits in the letter, the war in Ukraine has challenged Gazprom, as it has resulted in the loss of the European market and sanctions.
In the transition period after Vladimir Putin's forces invaded, when commodity prices drastically increased, and many European Union countries still bought gas from Russia, Gazprom had some advantages. The company ended 2022 with a profit of 1.23 trillion rubles.
However, since then, the conglomerate's situation has worsened. In 2023, Gazprom recorded a loss of 629 billion rubles, its first in 23 years. Last year, the company reportedly ended with a deficit of 309 billion rubles.
Gazprom's situation will worsen further
Washington dealt another blow to the Russian giant last Friday. The US mainly targeted the oil industry, but it didn't stop there. The U.S. Department of State went a step further by blocking two active LNG projects and the activities of entities from third countries supporting Russian energy exports.
Various effects are already visible. The bulk carrier Cool Rover, filled with Russian liquefied gas, was stuck off the coast of Spain on Friday. Since then, the commodity it carries has been "tainted" by sanctions announced by the U.S. In theory, no one should buy it.
The sanctions also have another side. U.S. President Joe Biden said it is a painful blow to Russia, but the effects of the restrictions will be felt not only by Russia. Oil prices have risen and reached their highest level in more than four months, as the next wave of US sanctions against the Russian energy industry threatened to reduce supply in an already tightening global market, Bloomberg reported on Monday at 7:00 AM Eastern Time.
