Russian gas giant Gazprom plans to reduce central office staff by 40%
State-owned Russian energy corporation Gazprom is considering reducing its central office staff by 40%, as the company grapples with significant losses and reduced European gas exports, multiple sources reported on 13 January.
Russia’s dominance in Europe’s gas market has dwindled to a single route via Türkiye, as most EU nations reject Russian natural gas, viewing Moscow’s energy revenues as directly funding its war in Ukraine. Gazprom now faces restructuring amid multiple challenges, including sanctions on Gazprom-neft, the Nord Stream pipeline explosion, and drastically reduced exports. Meanwhile, the company’s central administration has expanded significantly over the past 20 years.
Russian news media outlet 47News published a 23 December letter, containing Gazprom Deputy CEO Elena Ilyukhina’s proposal to company CEO Alexei Miller, suggesting that the central office staff in St. Petersburg should be cut from 4,100 to 2,500 employees.
Gazprom’s official representative Sergei Kupriyanov confirmed the authenticity of the letter to TASS but declined to provide additional comments.
“Ilyukhina’s proposal to shrink Gazprom’s workforce is likely an effort to address economic strains due to the reduction of Russian gas exports to Europe since 2022 and Ukraine’s recent refusal to renew a contract to transport Russian gas to Europe via Ukraine,” the Institute for the Study of War noted.
The proposed cuts come as Gazprom faces significant financial challenges. According to Russian news outlet 47news, the current wage bill for the central office amounts to 50 billion rubles or approximately $485 million.
Reuters reports that Gazprom, which employs 498,000 people according to company data, posted a loss of almost $7 billion in 2023 – its first loss since 1999. Per 47news, this followed a reduction in revenue from 6.4 trillion rubles in 2021 to 4.3 trillion rubles in 2024.
An industry source told Reuters that while the proposed cuts were drawing support from senior management, the final decision remained unclear.
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