Unlock the Editor’s Digest totally free
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.
Russian vitality group Gazprom is contemplating plans to axe 1,600 jobs — a report quantity — as the corporate struggles with plummeting fuel gross sales in Europe and sanctions in opposition to its oil arm within the wake of the Ukraine battle.
Gazprom chief govt Alexei Miller was notified in a letter about plans to make cuts on the central workplace workforce in St Petersburg, from 4,100 to 2,500, about 40 per cent, in keeping with Russian Telegram channels and later confirmed by an official firm consultant.
If applied, it might mark the biggest lay-off within the state-owned fuel monopoly’s historical past because it faces unprecedented financial challenges following Russia’s full-scale invasion of Ukraine, which has ravaged its funds.
The vitality group suffered its largest loss in not less than 25 years — Rbs629bn ($6.9bn) — in 2023 as fuel gross sales greater than halved after explosions broken the Nord Stream pipeline to Europe.
Revenues fell nearly 30 per cent yr on yr to Rbs8.5tn, with fuel gross sales dropping from Rbs8.4tn to Rbs4.1tn.
Analysts say the losses present how Gazprom, as soon as a cash-rich “nationwide champion” that used its maintain over Europe’s vitality provide as a geopolitical weapon, had did not adapt to the crash in gross sales within the EU market.
European international locations have had higher success than anticipated to find different sources of fuel.
Though the corporate’s funds have improved in 2024, analysts say Gazprom is unlikely to return to its earlier revenue ranges.
The letter to Miller, written by Gazprom deputy chair Elena Ilyukhina on December 23, said that the “challenges going through the group” required “shortening decision-making timelines, eliminating redundant features, and enhancing worker give attention to outcomes”.
“The letter and the truth that it was leaked to the general public clearly present that issues usually are not going nicely on the firm, regardless of how a lot it tries to mission a picture of stability,” mentioned a former senior supervisor at a Russian vitality firm accustomed to Gazprom’s state of affairs.
“It’s evident {that a} vital variety of staff are sad with the proposal, which is why it ended up within the public area.”
They emphasise that the cuts apply solely to Gazprom’s headquarters in St Petersburg and never branches and subsidiaries throughout the nation, which make use of a number of hundred thousand individuals.
