Russia's energy giant Gazprom plans major layoffs as Europe market shrinks, media reports
The Russian energy giant Gazprom is preparing to lay off 1,600 employees from its central office as it faces significant financial losses and dwindling market presence in Europe, Russia's local 47News media outlet reported on Jan. 13.
The news comes after Ukraine halted the transit of Russian gas to other European countries, ending an arrangement dating back to Soviet times.
Deputy Chairman of the Management Committee Elena Ilyukhina reportedly sent a letter to Gazprom CEO Alexey Miller, outlining the need for cost optimization due to "challenges facing the Gazprom Group."
The letter suggests that 50 billion rubles ($480 million) are spent annually on salaries. To address this issue, it proposes reducing the central office workforce from 4,100 to 2,500 employees.
Sergey Kupriyanov, deputy chairman of Gazprom's Board of Directors, confirmed the letter's authenticity to Forbes Russia but declined to provide further comments.
Gazprom has suffered massive losses following the collapse of its European gas market, with exports to Europe dropping by more than 80% since 2021. Shares of the company fell to their lowest level since January 2009, trading at 106.1 rubles ($1.01) on Dec. 17, representing a 33.5% decline since the start of 2024.
Heavy taxation further burdened Gazprom, which contributed $28 billion to the Russian government in 2023, accounting for 9% of state revenue.
The EU's decision to pivot to alternative gas sources after the full-scale invasion of Ukraine triggered the decline, significantly reducing Europe's reliance on Russian supplies, with the exception of countries like Hungary, Slovakia, and Austria.
Russia's direct pipeline gas supplies to the EU have now halted completely as Ukraine chose not to prolong the transit deal with Gazprom past Dec. 31, 2024. At the same time, the EU countries purchased record volumes of liquefied natural gas (LNG) in 2024.
Martin Fornusek
