Gazprom faces drastic layoffs amid sanctions and losses
Russian media have published the contents of a letter sent to Gazprom's head by its vice president, Elena Ilyukhina. In the letter, she calls for substantial layoffs at the company's headquarters. Forbes confirmed the document's authenticity. This is due to the conglomerate's dire situation following the invasion of Ukraine.
In a letter to the head of the conglomerate, oligarch Alexey Miller, the vice president of Gazprom's management board, urged a reduction in the headquarters workforce 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. Currently, the salary fund consumes 50 billion rubles annually.
Gazprom is in a precarious situation due to the war in Ukraine, largely because of the loss of the European market and sanctions, as Ilyukhina admits in the letter.
In the period following Vladimir Putin's invasion, when commodity prices surged, and many European Union countries continued to purchase gas from Russia, Gazprom was not adversely affected. The company ended 2022 with a profit of 1.23 trillion rubles.
However, the conglomerate's situation has deteriorated significantly since then. 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 delivered another blow to the Russian giant last Friday. Although the main target was the oil industry, the impact was broader. The U.S. Department of State went further by blocking two active LNG projects and the activities of entities from third countries supporting Russian energy exports.
Various effects are already evident. The bulk carrier Cool Rover, filled with Russian liquefied gas, was stranded off the coast of Spain. Since Friday, 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 broader implications. U.S. President Joe Biden stated that they're a significant blow to Russia, but the effects of the restrictions will not solely impact Russia. Bloomberg reported that oil prices rose to their highest levels in more than four months on Monday morning, as the next wave of U.S. sanctions against the Russian energy industry threatened to reduce supply in an already tightening global market.
