Economy Under Pressure: How Russian Companies Are Cutting Costs Amid War and Sanctions
Over the past year, Russia’s economic landscape has undergone significant transformations, adversely affecting wage levels and working conditions in key industries.
From railway transport to metallurgy, cement production, and mining — many large corporations are compelled to implement severe cost-cutting measures due to internal struggles and external sanctions.
Notably, wage arrears have tripled compared to the previous year, signaling deep-rooted crises within the country’s industrial sector.
Major players in metallurgy and mining, such as ‘Alrosa’ and ‘Svezza’, are forced to reduce salaries and cut production to avoid bankruptcy.
Meanwhile, leading construction and automotive companies are shifting to shorter workweeks and layoffs, driven by declining demand and prolonged economic stagnation.
Significant difficulties also arise from diminishing supplies of coal, metals, and oil, which undermine Russia’s status as a major global exporter.
According to macroeconomic analysts, sectors not related to military industry have already contracted by 5.4% since the start of the year, and the overall economy shows signs of slowdown with projected growth below 1%.
Additionally, the government is employing measures impacting financial stability — for instance, companies have requested employees to work unpaid additional days and cut working hours independently.
All of these developments highlight how war and sanctions deeply weaken Russia’s industrial complex and threaten its economic future.