Published by Global Banking and Finance Review
Posted on January 24, 2025
By Vladimir Soldatkin
MOSCOW (Reuters) - Gazprom is considering cutting about 40% of its headquarters staff - more than 1,500 job cuts - as the Russian gas giant grapples with the loss of most of its sales to Europe, state news agency TASS reported on Monday.
Deputy CEO Elena Ilyukhina sent the proposal on job cuts at its central office in St. Petersburg to Gazprom boss Alexei Miller, TASS reported citing a media outlet called 47news.
Ilyukhina argued in the letter dated Dec. 23, a photocopy of which was posted online by 47news, that staff numbers at the central office should be cut by around 40%, to 2,500 from 4,100.
The wage bill at the unit had crept up to 50 billion roubles ($488 million), she noted.
Contacted by Reuters, a company spokesperson confirmed the report. An industry source said the proposed cuts were drawing support from senior management but it was not clear what the final decision would be.
Gazprom, which employs 498,000 people, according to the company's data, posted a loss of almost $7 billion in 2023, its first since 1999, as it lost most of its lucrative European market due to fallout from the war in Ukraine.
Its European sales were slashed further when Russian gas exports via Soviet-era pipelines crossing Ukraine came to a halt on New Year's Day after Kyiv refused to renew a transit deal.
After decades of dominance over Europe's energy markets, Russia's gas sale to the continent have been reduced to one route via Turkey.
Russia's overall economy has so far managed to adapt to Western sanctions over Ukraine, with its jobless rate at a record low of around 2.4%.
However, the central bank has warned there are signs of overheating amid galloping inflation and some companies, such as Gazprom, have been hard hit.
($1 = 102.5500 roubles)
(Reporting by Vladimir Soldatkin and Oksana Kobzeva; editing by Mark Trevelyan, Andrew Osborn and Jason Neely)
