Uncontrolled growth of the managerial staff at Gazprom
Information about the considered layoffs comes from a letter from Gazprom’s management to its general director, Alexei Miller, writes The Moscow Times.
The company’s revenues collapsed after the Russian invasion of Ukraine. In 2023, Gazprom recorded its first financial loss since 1999. The problem is an overly bloated class of managers in the company. The letter shows that The management team at the company’s headquarters in St. Petersburg has grown to over 4,100 people over the past two decades.
Large layoffs of managers at Gazprom
According to 47news.ru, the expenditure on salaries for managers at the company’s headquarters exceeded $486 million. As proposed by the management board as part of the optimization, the number of managers is to be reduced to 2,500.
Gazprom’s deputy CEO, Sergei Kupriyanov, confirmed the authenticity of the letter to Forbes Russia, but declined to provide additional comments. There is no information yet on whether Gazprom’s CEO will accept the management board’s proposal.
Gazprom shares are at their lowest level in 16 years
The value of Gazprom shares dropped in December to lowest level in 16 years. This is investors’ reaction to the upcoming end of the contract for the transit of Russian gas to Europe via Ukraine.
The EU has largely cut itself off from gas imported from Russia. It aims to completely stop imports of Russian fossil fuels by 2027, but currently imports of Russian LNG are not subject to sanctions and still form part of gas supplies to the EU.
Imports of Russian liquefied natural gas (LNG) to the EU reached a record level in 2024. By mid-December, Europe imported 16.5 million tonnes of Russian LNG, up from 15.18 million tonnes in 2023.
Drastic decline in the value of Gazprom
Gazprom is a state-owned company that is the world’s largest producer of natural gas. It employs almost half a million people. Gazprom became part of the Nord Stream consortium building the Northern Gas Pipeline.
Today, the company’s capitalization is approximately USD 30 billion. It experienced a huge drop in value during the Russian imperial adventure. Back in 2011, it was valued at over $193 billion.