Gazprom faces mass layoffs amid escalating financial 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 mass redundancies at the company's headquarters. An interview with Forbes confirmed the document's authenticity. This is the result of the dire circumstances facing the conglomerate 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 staff at the headquarters from 4,100 to 2,500. She noted that the number of employees in the company's administration had increased significantly over the past twenty years. Currently, the salary fund consumes 50 billion roubles annually.
Gazprom is in a difficult position due to the war in Ukraine, owing to the loss of the European market and sanctions, as Ilyukhina admits in the letter.
During the transitional period after Vladimir Putin's forces invaded, when commodity prices surged and many European Union countries still purchased gas from Russia, Gazprom did well. The company ended 2022 with a profit of 1.23 trillion roubles.
However, since then, the situation has significantly worsened for the conglomerate. In 2023, Gazprom recorded a loss—the first in 23 years—amounting to 629 billion roubles. Last year, the company reportedly finished with a deficit of 309 billion roubles.
Gazprom's situation set to deteriorate further
Washington delivered another blow to the Russian giant last Friday. The US targeted the oil industry primarily, but not exclusively. 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 noticeable. The bulk carrier Cool Rover, laden with Russian liquefied gas, was stranded 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 purchase it.
The sanctions also have additional implications. U.S. President Joe Biden stated that they are a painful blow to Russia, but the restrictions' impact will not solely affect Russia. Bloomberg reported that oil prices have risen and reached their highest level in more than four months on Monday morning GMT, as the latest wave of US sanctions against the Russian energy industry threatens to reduce supply in an already tightening global market.
