The Daily Populous Tuesday March 18th, 2025 night edition
Authored by irishstar.com and submitted by LongDukDongle

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Russia's economy is teetering on the brink of collapse, with industrial production taking a nosedive and major corporations initiating widespread layoffs as the impact of a three-year war with Ukraine inevitably hits home.

The most recent PMI data indicates contraction in both the service and manufacturing sectors, with the manufacturing index dropping from 53.1 points to 50.2 within a month - an unmistakable indicator of an economy on shaky ground as Putin consider drastic action.

Analysts suggest that the record-high interest rates of 21% over two decades and the economic repercussions of the war on Ukraine aggravate the situation, pushing Russia's economy towards a severe and perilous slowdown.

Olga Petrova, managing partner at VIZIVI Consult, one of Russia's top recruitment agencies, revealed to independent Russian news outlet The Bell: "Several companies are discussing behind closed doors about reducing up to 40-50% of contracted staff, including IT specialists."

The job cuts have been drastic, especially in sectors previously considered safe. The military-industrial complex, already under pressure from the cost of war, has taken a significant hit as production targets stumble.

Meanwhile, private sector firms like internet behemoth VK, mobile operator, and energy giant Gazprom are all making cutbacks.

Anastasia Ovcharenko, a partner at Kontakt InterSearch Russia, cautioned: "It's likely that IT specialists working on investment projects with uncertain prospects will be let go.

"These projects will be closed and their resources redistributed, but there won't be a big story where all tech staff are fired."

The downturn is also hitting medium-sized companies hard, especially those saddled with hefty debts. These firms are crumbling under unmanageable borrowing costs, forcing many to cut back on their workforce to survive.

The human toll of conflict further intensifies the economic turmoil. Russia's military is suffering losses in its personnel and financial stability. With over 200,000 Russian soldiers estimated to be dead or injured as per the UK Ministry of Defense, Putin's push to reinforce his troops has involved drafting vast numbers of men, many of whom are dispatched to the battlefields of Ukraine.

The repercussions are being felt deeply by families and industries alike. Natalia Milchakova, a top analyst at Freedom Finance Global, remarked: "We can't rule out that in some sectors unemployment might go up slightly, for example if small and medium-sized enterprises leave the market or considerably cut expenditure because they cannot access finance due to high interest rates."

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She also noted: "But here, too, layoffs will mostly affect white-collar workers, not blue-collar staff, which practically every Russian industry needs.

"This has resulted in an overall stagnation of wages. Despite government claims of minimal wage growth, experts concur that the situation is much more grim.Olga Shamber from Get experts, a recruitment firm, observed: "The wage race will likely run out of steam this year. Salaries will rise, but not as fast as before.

"Adding to the conversation, Anastasia Ovcharenko from Kontakt InterSearch Russia said: "Business is caught between a rock and a hard place. On the one hand, high interest rates and expensive loans.

"She continued: "On the other, this also affects the lives of employees. "Highlighting the impact on workers, she explained: "If previously they could get a mortgage at 10%, now they can only get one at 30%, and that means they will demand more money from their employers.

"Analysts are sounding the alarm that the cumulative effects of the death toll, economic turmoil, and the escalating costs of the conflict could be driving Russia towards an economic meltdown.Oleg Buklemishev, a notable Russian economist and current Director of the Economic Policy Research Center at Moscow State University, has issued a stark warning: "There is no longer enough of a profit margin to significantly increase workers' salaries. There will be no profit cushion to make this possible."

eminusx on March 17th, 2025 at 12:32 UTC »

as per usual, the people will suffer and bear the cost while the gremlin in the kremlin gorges himself on Napoleon Cake

JiminyStickit on March 17th, 2025 at 12:05 UTC »

The oligarchs have all the money.

Just like what's rolling out in the states right now.

DjBiohazard91 on March 17th, 2025 at 11:58 UTC »

Guessing it's time for a 3 day Special Monetary Operation huh?