Latest news Ukraine

Russian gas giant Gazprom plans to reduce central office staff by 40%

The corporation evaluates substantial workforce cuts at Saint Petersburg headquarters following reduced European market access due to Russia’s invasion of Ukraine.

byYuri Zoria

14/01/2025

2 minute read

Gazprom state-owned multinational energy corporation headquartered in Lakhta Center in Saint Petersburg. Photo: Wikipedia

Russian gas giant Gazprom plans to reduce central office staff by 40%

State-owned Russian energy corporation Gazprom is considering reducing its central office staff by 40%, as the company grapples with significant losses and reduced European gas exports, multiple sources reported on 13 January.

Russia’s dominance in Europe’s gas market has dwindled to a single route via Türkiye, as most EU nations reject Russian natural gas, viewing Moscow’s energy revenues as directly funding its war in Ukraine. Gazprom now faces restructuring amid multiple challenges, including sanctions on Gazprom-neft, the Nord Stream pipeline explosion, and drastically reduced exports. Meanwhile, the company’s central administration has expanded significantly over the past 20 years.

Russian news media outlet 47News published a 23 December letter, containing Gazprom Deputy CEO Elena Ilyukhina’s proposal to company CEO Alexei Miller, suggesting that the central office staff in St. Petersburg should be cut from 4,100 to 2,500 employees.

Gazprom’s official representative Sergei Kupriyanov confirmed the authenticity of the letter to TASS but declined to provide additional comments.

“Ilyukhina’s proposal to shrink Gazprom’s workforce is likely an effort to address economic strains due to the reduction of Russian gas exports to Europe since 2022 and Ukraine’s recent refusal to renew a contract to transport Russian gas to Europe via Ukraine,” the Institute for the Study of War noted.

The proposed cuts come as Gazprom faces significant financial challenges. According to Russian news outlet 47news, the current wage bill for the central office amounts to 50 billion rubles or approximately $485 million.

Reuters reports that Gazprom, which employs 498,000 people according to company data, posted a loss of almost $7 billion in 2023 – its first loss since 1999. Per 47news, this followed a reduction in revenue from 6.4 trillion rubles in 2021 to 4.3 trillion rubles in 2024.

An industry source told Reuters that while the proposed cuts were drawing support from senior management, the final decision remained unclear.

Related:

You could close this page. Or you could join our community and help us produce more materials like this. We keep our reporting open and accessible to everyone because we believe in the power of free information. This is why our small, cost-effective team depends on the support of readers like you to bring deliver timely news, quality analysis, and on-the-ground reports about Russia's war against Ukraine and Ukraine's struggle to build a democratic society. A little bit goes a long way: for as little as the cost of one cup of coffee a month, you can help build bridges between Ukraine and the rest of the world, plus become a co-creator and vote for topics we should cover next. Become a patron or see other ways to support. Become a Patron!

To suggest a correction or clarification, write to us here

You can also highlight the text and press Ctrl + Enter

We are an independent media outlet that relies solely on advertising revenue to sustain itself. We do not endorse or promote any products or services for financial gain. Therefore, we kindly ask for your support by disabling your ad blocker. Your assistance helps us continue providing quality content. Thank you!