Major Russian companies are trying to cut costs by shortening the workweek, sending employees on unpaid leave, or by laying them off.
In several sectors, cost-cutting measures have been attempted at the expense of the workforce – from railways and car manufacturers to metallurgy, diamond mining, and cement production.
The efforts to reduce labor costs reflect the pressure on Russia's economy, amidst President Vladimir Putin and the U.S.-led NATO military alliance facing off in Ukraine, the bloodiest conflict in Europe since World War II, reports Reuters.
Russian Railways has asked employees at the central office to take three additional days off per month at their own expense, in addition to holidays and non-working days, according to sources cited by the news agency.
Auto manufacturers GAZ, VAZ, and KAMAZ have switched to a four-day workweek. GAZ discontinued this work schedule in October, while the other auto manufacturers continue with a shortened workweek.
Cemros, the largest cement producer, also moved to a four-day workweek in October.
Diamond producer Alrosa has reduced salaries by 10% for employees not working in mining and has suspended operations at its less profitable mines since spring, continuing this trend in the summer. The company told Reuters that it aims to minimize layoffs, without specifying how many people have been affected.
Due to lack of demand, the Sveza group of companies closed its plywood factory in Tyumen, leaving over 300 people unemployed.
In metallurgy, "a quiet restructuring is taking place," said an industry source. The largest companies have not yet switched to a four-day workweek, but almost all metal processing plants have reduced auxiliary staff. The source cited said that the industry has too many employees for the current situation, but efforts were made to avoid mass layoffs.
Economists point to the high key interest rate, strong ruble, declining domestic demand, decreased exports due to sanctions, and cheap imports from China as factors negatively impacting the Russian economy.
All these factors reveal the challenges that the Russian economy has faced during the war in Ukraine, concludes Reuters.