According to a letter from one of Gazprom's board members to the company's CEO, the Russian energy giant is considering cutting staff at its headquarters by 40% after announcing its first loss in 24 years.
The letter was reported by St. Petersburg-based news agency 47News. Petersburg reported for the first time earlier this week a proposal to reduce the number of central office staff from 4,100 to 2,500. The date of writing the letter is December 23, 2024.
A Gazprom spokesperson confirmed the authenticity of the letter to AFP and Russian state news agency TASS.
In the proposal, Elena Ilyukhina - Vice Chairman of the Board of Directors - noted that the salaries of Gazprom managers have increased many times over the past 2 decades to about 486.5 million USD/year.
"The challenges Gazprom is facing require less preparation and decision-making time," she said in a letter to Gazprom CEO Alexei Miller.
Gazprom could rely on automation and digitalization for positions such as accounting and planning, Ilyukhina said.
47News reported that Ms. Ilyukhina also estimated that a 40% reduction in personnel would put Gazprom's staff management ratio on par with Rosatom - Russia's state nuclear power company.
In June 2024, Gazprom said the company would have 498,000 employees by 2023. Meanwhile, Rosatoms general director reported to Russian President Vladimir Putin in October of the same year that his company is expected to have about 400,000 employees in 2024.
Ms. Ilyukhina added that the savings from the proposed staff cut could be converted into new performance bonuses for retained employees.
Gazprom announced its first annual loss in 24 years in May last year. The company announced a net loss of 629 billion rubles in 2023, equivalent to about 6.84 billion USD at that time. The last time Gazprom suffered a net loss was in 1999.
The gas giant continues to face many difficulties as the group's flagship company announces a loss of $3.2 billion in the 9-month period ended in September 2024.
It is not yet clear whether Gazprom CEO Alexei Miller approved Ms. Ilyukhina's dismissal proposal. Gazprom declined to comment in addition to confirming the letter was real, TASS reported.
For years, Russia has been a major gas supplier to the European Union until the Russia-Ukraine conflict broke out, causing Europe to seek to escape dependence on Russian energy. The transition took many years, as the EU had to reduce its share of Russian gas imports from 40% in 2021 to 8% in 2023.
The majority of this gap is filled with gas supplies from the US, with US gas imports into the EU skyrocketing from 18.9 billion cubic meters in 2021 to 56.2 billion cubic meters in 2023.
More recently, Ukraine has refused to extend contracts for transporting Russian gas to Western customers.
