Oct. 9, 2025
From the railway and auto industries to metals, coal, diamonds, and cement, Russia’s largest industrial companies are being forced to cut working hours or headcount amid a slowing economy, stagnating domestic demand, and falling exports.
At least six companies in the mining, transport and transport engineering sectors, including major industrial giants, have shortened the work week to reduce labor costs without laying off employees, Reuters reports, citing sources and official data.
Russia’s largest cement producer, Cemros Holding, has switched to a four-day workweek from October until the end of the year to avoid layoffs amid a sharp decline in the construction industry and rising cement imports.
“This is a necessary anti-crisis measure. Its goal is to retain all staff,” company spokesman Sergei Koshkin told Reuters.
The company, which includes 18 factories and over 30 quarries for the extraction of non-metallic materials throughout Russia, employs 13,000 people.
Increased imports from Belarus, Iran, Kazakhstan, and China, along with a decline in housing construction, have contributed to a decline in cement demand. Cemros expects cement consumption in Russia this year to be less than 60 million tons—the lowest level since the widespread restrictions imposed during the coronavirus pandemic in 2020, Koshkin said.
The Russian Ministry of Labor, Industry, and Energy did not respond to Reuters requests.
Russian President Vladimir Putin is increasingly concerned about the distortions in the Russian economy caused by the “special operation” in Ukraine, sources told Reuters in January of this year.
According to the Center for Macroeconomic Analysis and Short-Term Forecasting, non-defense industrial sectors have reduced output by 5.4% overall since the beginning of the year, and over the last three reporting months (August to May), the decline has been frontal: it is absent only in wood processing and the production of paper and paper products.
During Putin’s first two terms, from 2000 to 2008, Russia’s economy grew from less than $200 billion to $1.7 trillion. But Russia’s nominal GDP now stands at only $2.2 trillion—roughly the same as in 2013, the year before the annexation of Crimea.
In 2022, when Putin ordered the invasion of Ukraine, the economy contracted by 1.4%, but then outpaced the G7 average, expanding by 4.1% in 2023 and 4.3% in 2024. This year, the Ministry of Economic Development forecasts GDP growth of just 1.0%.
Putin publicly rejected claims by senior Russian bankers that the economy was stagnating, saying the authorities were deliberately slowing the economy to curb inflation.
Chinese imports, high rates and low demand
Economists say companies face a growing list of challenges—high interest rates, a strong ruble, falling domestic demand, weak export markets, including due to sanctions, and cheap Chinese imports.
Russia’s largest employer, the railway monopoly Russian Railways, which employs around 700,000 people, has required its central office employees to take three additional days off per month at their own expense, in addition to their regular vacations and non-working days, two sources familiar with the situation at the company told Reuters.
Russian Railways, considered a mirror of the Russian economy, particularly in terms of raw materials exports, is losing revenue amid declining supplies of coal, metals, and oil. Russian Railways declined to comment.
The Gorky Automobile Plant (GAZ), a leading maker of light commercial vehicles with at least 20,000 employees, switched to a four-day work week in August, as did truck maker Kamaz, which employs about 30,000 people.
The union at AvtoVAZ, Russia’s largest automaker with about 40,000 employees, confirmed to Reuters that the company had switched to a four-day week from September 29.
The company itself, which had previously reported that it was considering this possibility, declined to comment.
A GAZ representative reported that the company returned to a five-day workweek in October. Kamaz stated that the situation has not yet changed and declined to comment further.
The world’s largest diamond producer by carat, Alrosa, has cut pay for employees not directly involved in production by 10%, partly by switching to part-time work. Furthermore, in the spring and summer, the diamond miner suspended operations at its less profitable deposits—Verkhnyaya Muna and two sites at Almazy Anabara.
Alrosa told Reuters it was aiming to minimize layoffs, but did not specify how many employees had been laid off.
A number of companies in the metallurgy, mining, wood processing, and coal industries are cutting workweeks, personnel, or production, according to the companies themselves and sources in these industries.
Sveza, one of Russia’s leading wood and paper producers, closed its plywood mill in Tyumen last month due to a sharp decline in demand, the regional prosecutor’s office reported. More than 300 people lost their jobs.
The first signs of tension are appearing in Russian government statistics. Overdue wage arrears in Russia at the end of August amounted to 1.64 billion rubles—an increase of 1.15 billion rubles, or 3.3 times, compared to the same period last year.
The geography of Russian heavy industry enterprises, which are often city-forming in cities and towns in the European part of Russia and the Urals, suggests that wage cuts could significantly impact the well-being of entire regions.
THE STATE HAS TO SUPPORT
In previous periods of crisis, Russia has bailed out large employers to prevent social unrest in industrial cities, which often depended on a single enterprise.
Russian Railways and automakers received government support during the 2008–2009 global crisis to avoid mass layoffs. In 2022, Russia recommended that automakers send employees on furlough instead of laying them off.
Current economic difficulties have already forced the government to intervene in industries ranging from footwear to coal and metals, offering discounts on rail transport, tax deferrals, and targeted government support.
The coal industry, which employs about 150,000 people, has been hit hard by falling exports and low global prices, Russian officials said.
Deputy Prime Minister Alexander Novak reported to Putin in April that the industry’s financial situation was deteriorating: 30 enterprises, employing approximately 15,000 people and producing approximately 30 million tons per year, were at risk of bankruptcy.
According to Rosstat, the net losses of coal companies in January–July were twice as high as for the entire 2024 period, amounting to 225 billion rubles; 65% of enterprises are unprofitable.
Authorities in Kuzbass, Siberia’s largest coal basin, announced in September the closure of 18 of its 151 enterprises.
NEFT Research consulting partner Alexander Kotov, citing data from coal companies, reported that in the first half of the year, 16,000 people were hired in the coal industry, while almost 19,000 people were laid off, of which only 2,400 were transferred to other production facilities.
“If we don’t urgently begin saving the coal industry, it could be engulfed by a wave of crisis, which could lead to massive layoffs,” he said, estimating the costs of relocating, reemploying, and retraining miners at 1 trillion rubles.
Mechel, one of Russia’s largest coal producers, reported in August an increase in losses and the suspension of production at one of its mines and some sections of its open-pit mines, as well as a reduction in the production of unprofitable grades.
An industry source told Reuters on condition of anonymity that Mechel carried out staff reductions this summer. The company declined to comment.
Vladimir, a miner from Kuzbass, told Reuters that his income had fallen in recent months.
“I now earn less in my higher positions than I did in my lower positions,” he said, declining to give his last name.
He noted that he has enough to live on, more or less, and that miners in the region who lost their jobs due to layoffs can still find new work.
“Wages have been cut everywhere, absolutely everywhere (in Kuzbass)… They say there’s a crisis, no one needs coal,” he said.
“In the current crisis, coal miners are literally forced to survive. Large players—coal holdings… are trying to transfer staff from temporarily idle facilities to other sites… Smaller companies have almost no ‘safety margin,’ they are forced to reduce their workforce and are faced with the inability to pay wages and compensation to those laid off,” wrote Andrey Panov, First Deputy Governor and Head of the Kuzbass Government, on Telegram in June, citing the Spiridonovskaya mine as an example.
By October, the mine, which had been failing to pay wages, had entered bankruptcy proceedings, and 734 of its 938 employees had resigned, including miner Vladimir.
Rostekhnadzor suspended operations at the mine on October 7 due to unacceptable air temperatures, a representative of the agency reported on its Telegram channel on Thursday.
METALLURGY UNDER STRESS
The Russian metallurgical industry is also showing signs of trouble. The government is considering a moratorium on bankruptcies in the metallurgical sector and a number of other support measures, according to the minutes of the special commission on financial stability meeting on August 28.
Russia is the world’s fifth-largest steel producer, with an output of approximately 71 million tons in 2024.
“There’s a quiet downsizing going on in the metals industry,” said an industry source, blaming high interest rates, a strong ruble, and weak demand both domestically and internationally.
While the industry has not yet switched to a four-day week, almost all metallurgical companies are cutting support staff, he said.
A second source believes that companies in the industry want to avoid mass layoffs. “They’ll most likely introduce a four-day workweek, but none of the major companies have done so yet,” he said.
Awesome news for the mafia economy. Most workers can’t get to work anyway due to lack of fuel or cars broken due to tainted fuel. Those who are laid off, however, are as good as dead or crippled, because the vampire will use them as meat puppets. Happy times are here, in the mafia-terrorist state.
“Wages have been cut everywhere, absolutely everywhere (in Kuzbass)… They say there’s a crisis, no one needs …(russian)…coal,”
I’ll go even further; no one needs russians.