Gazprom, Russia's state-controlled gas monopoly, is weighing substantial layoffs at its central office in St. Petersburg as it confronts sharp financial setbacks and a drastically reduced European customer base. According to reports from TASS and other media, Deputy CEO Elena Ilyukhina has proposed slashing the headquarters workforce by 40%, reducing staff from 4,100 to 2,500 employees.
In a letter dated December 23, 2024, Ilyukhina highlighted the need to cut costs, citing an escalating wage bill that reached 50 billion roubles ($488 million). The proposal has gained traction among Gazprom’s senior management, though no final decision has been made.
Gazprom currently employs approximately 498,000 people globally, making the potential cuts a small fraction of its total workforce but a significant reduction at its central office.
Gazprom reported a loss of nearly $7 billion in 2023, marking its first negative earnings since 1999. The company's financial troubles stem primarily from losing its European market, which was historically its most lucrative. Following the war in Ukraine and subsequent sanctions, Gazprom's exports to Europe have been reduced to a single route via Turkey.
Compounding its challenges, Russian gas exports through pipelines crossing Ukraine ceased on January 1, 2025, after Kyiv refused to renew a transit agreement. These developments have eroded decades of Gazprom's dominance in Europe's energy sector.
Despite broader resilience in Russia's economy, with unemployment at a record low of 2.4%, Gazprom's challenges underscore the uneven impact of sanctions and market losses on Russian industries. Inflation remains a concern, with signs of economic overheating, according to the Russian central bank.
