Record losses and exit from European markets: Gazprom prepares for significant layoffs

Gazprom plans to lay off more than 1,500 employees at its headquarters to reduce salary costs and optimize the company's operations. Against the backdrop of record losses and the loss of key European markets, the monopoly is also actively relocating employees to Turkey, where a new gas hub is being created.

This is reported by the Russian media with reference to an official document of the company. The number of employees is planned to be reduced by almost half, from 4100 to 2500 people.

This initiative is outlined in a letter from Elena Ilyukhina, Deputy Chairman of the Company's Board. The document states that staff optimization is necessary due to the excessive increase in the number of employees over the past decades and the huge salary costs, which reach 50 billion rubles per month.

Reasons for the staff reduction

In her letter, Elena Ilyukhina emphasized the need to reduce duplication of functions in the company, reduce bureaucratic burden, and cut social security costs. According to her, the challenges faced by Gazprom require optimization of processes and a corresponding reduction in staff. "The challenges facing the company require optimization of the process of solving them and reducing costs," Ilyukhina said.

In addition to internal problems, Gazprom has suffered serious losses in foreign markets. After Russia's war against Ukraine began, the company lost more than 80% of its European exports, and most of its European subsidiaries were either liquidated or nationalized by local governments. In particular:

• Securing Energy for Europe GmbH was nationalized in Germany ;

• in the UK, the company lost control over Gazprom Marketing & Trading;
• two Dutch companies Gazprom Sakhalin Holdings B.V. and Gazprom Finance B.V. were liquidated after the termination of the agreement between Russia and the Netherlands on the avoidance of double taxation.

These companies used to allow Gazprom to withdraw profits from Russia with the payment of taxes at an effective rate of 2-3%. However, after the agreement was terminated, the benefits disappeared and the assets were transferred to Russian jurisdiction.

After gas transit through Ukraine stops in early 2025, Gazprom will be left with only the Turkish Stream as one of the five key routes to Europe. However, even with its help, the company will not be able to restore the lost export volumes. In 2024, Gazprom pumped only 32 billion cubic meters of gas, the lowest figure since the late 1970s. For comparison, in 2021, this figure was more than 170 billion cubic meters.

Amid these changes, Gazprom is losing ground in the international market. Analysts predict that in 2025, supplies to Europe and Turkey will drop to 45 billion cubic meters, compared to 50 billion in 2024.

In 2023, a significant number of Gazprom employees who worked on the Nord Stream and Turkish Stream pipelines left the European Union. The company actively relocated employees to Turkey, where it plans to create a new gas hub. Two Gazprom employees said they were leaving for Turkey with their families. According to them, the company even organized Turkish language courses, and at the end of the year, apartments in Istanbul were being found for employees.

Not only Russian citizens but also employees from the European Union who worked for Gazprom agreed to move. The main motivation for the move was non-market salaries, which were about a third higher than the market average.

In 2023, Gazprom suffered the largest losses in its history. The company lost 629 billion rubles, and gas production dropped to 404 billion cubic meters, the lowest level since the company was founded in 1990.

As OBOZ.UA reported earlier, all industrial enterprises, except for food production, stopped working in Transnistria due to the lack of gas after the termination of Russian gas transit through Ukraine. Energy reserves will last only for 10-20 days, which puts the region on the verge of economic collapse.

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