Ice on the Gulf of Finland in front of Gazprom’s headquarters at the Lakhta Centre in St. Petersburg, Russia, 9 March 2024. Photo: EPA-EFE/ANATOLY MALTSEV
Russian energy giant Gazprom is considering unprecedented staff cuts at its St. Petersburg headquarters after posting gigantic losses in 2023 and being on course to announce a comparable deficit for last year, regional news website 47 news reported on Monday.
In a letter to CEO Alexey Miller, a copy of which was obtained and published by 47news, the deputy chairperson of Gazprom’s management committee Yelena Ilyukhina suggested reducing staff from 4,100 to 2,500 people, noting that due to a several fold increase in employee numbers over the past 20 years, the company’s annual wage bill now stands at 50 billion rubles (€475 million).
Ilyukhina argued that Gazprom needed to optimise “all levels of management and production”, to free up funds to increase staff motivation and development and that a streamlined decision-making process and an increased focus on results were now needed to successfully overcome the company’s current challenges.
The letter, which another management committee deputy chairperson, Sergey Kupriyanov, confirmed to Forbes was genuine, comes just days after the US imposed its toughest sanctions yet on two major Russian oil companies, Gazprom Neft and Surgutneftegas.
In 2023 Gazprom, long one of Russia’s most profitable companies, posted its first annual loss since 1999, after losing almost all of its European customers due to sanctions against Russia over the war in Ukraine.
The company posted losses of 629.1 billion rubles (€6 billion) for 2023, higher than any other company in the country, while in the first nine months of 2024, according to its own financial statements, Gazprom incurred losses of some 309.11 billion rubles (€2.9 billion).
The Russian government has raised domestic gas tariffs to compensate for Gazprom’s losses, with utility costs rising by 10% on average across the country since July, and an even steeper price hike of almost 12% on average due to come into force later this year.
