Gazprom to sack half of its personnel to save tens of billions

Gazprom, Russia's natural gas monopoly, is to reduce the number of central office staff from 4,100 to 2,500 people, a letter to the head of Gazprom said. The company confirmed the authenticity of the letter, but declined to comment on it.

The letter with the proposal from Gazprom Management Committee Deputy Chairperson Elena Ilyukhina to CEO Alexey Miller about reducing the number of the company's central office was genuine, company representatives said.

"The document is relevant. We do not plan to comment," Sergei Kupriyanov, Deputy Chairman of the Gazprom Management Committee, Head of the Information Policy Department told Forbes.

Reports about Gazprom's plans for mass layoffs first appeared at St. Petersburg-based 47news website. The report said that the company was considering the idea to ​​​​halve the company's central office personnel from 4,100 to 2,500 people.

Gazprom Management Committee Deputy Chairperson Elena Ilyukhina sent the letter with the staff reduction proposal to CEO Alexey Miller on December 23, the publication said.

The letter stated that the Gazprom administration (the central office and branch 644 in St. Petersburg) had more than 4,100 employees, whose wage fund was evaluated at more than 50 billion rubles.

"The challenges facing the Gazprom Group require efforts to cut the decision-making time frame. This requires work to eliminate duplicating functions, as well as excessive bureaucratic processes generated by personnel not regularly involved in the company's operations," the letter said.

To this end, Ilyukhina proposed reducing the number of the company's administrative personnel to about 2,500 employees. The released resources could then be used "to increase motivation and develop personnel."

In 2015, Gazprom intended to increase the number of employees by one percent. In 2017, Gazprom and its subsidiaries were preparing to cut up to 500 employees due to the idea of ​​a phased transition to the implementation of new investment program.

Gazprom officially moved its central office to St. Petersburg in 2021. The office is currently registered at Lakhta Center, Lakhtinsky Prospekt 2. The former building of the company's central office in Moscow was transferred to the balance sheet of Gazprom Transgaz Moscow LLC in 2024.

In October 2024, Gazprom topped the rating of Russia's most unprofitable companies in 2023. In 2023, Gazprom suffered losses of about 583.1 billion rubles according to international financial reporting standards (IFRS).

In 2022, though, the company received a record profit of 1.3 trillion rubles. Gazprom's first losses in 25 years were mainly due to the depreciation of non-financial assets and exchange rate differences. Net cash flow from operating activities increased during the same period.

Details

class="mw-empty-elt"> 
PJSC Gazprom is a Russian majority state-owned multinational energy corporation headquartered in the Lakhta Center in Saint Petersburg. The Gazprom name is a contraction of the Russian words gazovaya promyshlennost (газовая промышленность, gas industry). In January 2022, Gazprom displaced Sberbank from the first place in the list of the largest company in Russia by market capitalization. In 2022, the company's revenue amounted to 8 trillion rubles. Gazprom is vertically integrated and is active in every area of the gas industry, including exploration and production, refining, transport, distribution and marketing, and power generation. In 2018, Gazprom produced twelve percent of the global output of natural gas, producing 497.6 billion cubic meters of natural and associated gas and 15.9 million tonnes of gas condensate. Gazprom then exports the gas through pipelines that the company builds and owns across Russia and abroad, such as Power of Siberia and TurkStream. In the same year, Gazprom has proven reserves of 35.1 trillion cubic meters of gas and 1.6 billion tons of gas condensate. Gazprom is also a large oil producer through its subsidiary Gazprom Neft, producing about 41 million tons of oil with reserves amounting to 2 billion tons. The company also has subsidiaries in industrial sectors, including finance, media and aviation, and majority stakes in other companies.