October 17, 2025

Russian Railways is preparing to lay off staff due to financial problems in the budget, which has been hit by a sharp decline in freight traffic and rising loan rates.

According to RBC , Russian Railways CEO Oleg Belozerov has instructed his deputies and heads of departments to prepare proposals for staff reductions, as well as structural changes and schedule adjustments, by November 1.

The state corporation is also introducing restrictions on hiring new employees, according to a Russian Railways spokesperson. According to him, this is aimed at improving the company’s efficiency amid declining workloads and a challenging economic environment.

In August, Russian Railways placed employees of its central office and departments on voluntary and compulsory unpaid leave—two days a month at their own expense. Now, a full-scale staff reduction will begin, affecting management, RBC reports.

Since the start of the war with Ukraine, Russian Railways has recorded a sharp decline in freight traffic: 3.9% in 2022, 0.2% in 2023, and 4.1% in 2024—a record decline in the past 15 years. From January to September 2025, Russian Railways’ freight traffic fell by another 6.7% year-on-year, with nearly all freight categories experiencing declines: coal by 2.3%, coke by 16.2%, oil and oil products by 5.3%, cement by 13.8%, and construction materials by 13.1%. The monopoly also recorded a record decline—26.6%—in grain transportation.

To make ends meet, Russian Railways slashed its investment program by almost 40%, pausing major railway construction projects, including the expansion of the Baikal-Amur Mainline (BAM) and the Trans-Siberian Railway for transporting raw materials to China. Total investment was reduced from 1.3 trillion rubles to 890 billion, and then by another 32.5 billion rubles. Specifically, the cuts targeted the renovation and modernization of fixed assets, including tracks, as well as the purchase of locomotives and railcars.

According to Russian Railways’ financial plan, the monopoly will lose 87 billion rubles this year due to the decline in freight traffic: under the new plan, the state corporation’s annual revenue will amount to 2.711 trillion rubles instead of 2.8 trillion. Freight traffic volumes across the Russian Railways network will decline by 36.7 million tonnes in 2025, to 1.205 billion tonnes, a 3% decrease from the planned figure, Reuters reported, citing non-public Russian Railways materials.

Last year, the company’s net profit fell ninefold, to 13.9 billion rubles, and by a further 23-fold, to 2.7 billion rubles, for the first half of 2025, according to Russian accounting standards.

(c)THE MOSCOW TIMES 2025