The Daily Populous Tuesday January 14th, 2025 day edition
Authored by businessinsider.com and submitted by BothZookeepergame612

Russia's state-owned gas giant is mulling a sweeping cut to its managing staff in St. Petersburg.

A letter from Gazprom's board to its CEO suggested layoffs of 40% for its headquarters amid "challenges."

The letter said wages among managers had risen to nearly $500 million a year.

Russian energy giant Gazprom is considering a 40% cut to its headquarters staff after posting its first loss in 24 years, according to a letter from one of its board members to the firm's CEO.

The letter, first reported by St. Petersburg-based outlet 47News on Monday, proposed that the central office head count be reduced from 4,100 to 2,500 people. It was dated December 23, 2024.

A Gazprom spokesperson confirmed the letter's authenticity with Agence France Presse and the state media outlet TASS.

In the proposal, Elena Ilyukhina, the board's deputy chairperson, wrote that wages for Gazprom managers had risen several times in the last two decades to about $486.5 million a year.

"The challenges facing the Gazprom group require a reduction in the time required for preparing and taking decisions," she wrote to CEO Alexei Miller.

Ilyukhina added that the company could instead rely on "automation and digitalization" for roles like accounting and planning.

47News wrote that Ilyukhina also estimated a 40% cut would align Gazprom's management-to-employee ratio with that of Rosatom, a state-owned nuclear energy firm.

Gazprom said in June 2024 that it had 498,000 employees for 2023. In comparison, Rosatom's director general told Russian leader Vladimir Putin in October that his company planned to have about 400,000 employees in 2024.

Ilyukhina added that some money saved in the proposed job cuts could be diverted to offering new performance bonuses for remaining employees.

Gazprom Group, which is mostly owned by the Russian state, posted its first annual loss in 24 years in May as wartime Western sanctions pushed its European customers to sever ties with Russian energy.

The company announced a net loss of 629 billion rubles, worth about $6.84 billion at the time, for the year 2023. It last suffered a net loss in 1999.

The gas producer has continued to face headwinds, with its flagship company announcing a $3.2 billion loss for the nine-month period ending in September 2024.

It's unclear if Miller has approved the layoffs suggested by Ilyukhina, and TASS reported that the company declined to comment beyond confirming that the letter is real.

Gazprom's press service did not respond to a request for comment sent outside regular business hours by Business Insider.

Russia had for years been a major supplier of natural gas to the European Union until Moscow's invasion of Ukraine prompted most of the region to start weaning itself off Russian energy. The transition has taken years, with the EU whittling down Russia's share of gas imports from 40% in 2021 to 8% in 2023.

Much of the gap has been filled by American gas supplies, with US gas imports to the EU jumping from 18.9 billion cubic meters in 2021 to 56.2 billion cubic meters in 2023.

More recently, Kyiv allowed the expiration of a pre-war contract to pipe Russian gas to Western customers such as Austria. Ukraine declined to renew the contract in early January.

Sad-Term-5455 on January 14th, 2025 at 05:19 UTC »

Will Those 40% end.....somewhere near Ukraine?

Virtual_Plantain_707 on January 14th, 2025 at 05:15 UTC »

It’s ok, the army has plenty of openings.

Delver_Razade on January 14th, 2025 at 05:07 UTC »

The Baltics are moving over to the EU grid on the 20th. That's going to be a major blow. With Ukraine no longer piping gas as well, one of their largest markets is basically dried up. The layoffs aren't going to make many people happy and with Ukraine hitting processing plants things are going to only get worse.

How long until Putin flies out a window.