cross-posted from: lemmy.sdf.org/post/43813414

  • Cutting costs, firms aim to trim work days, not jobs
  • Railway, construction, auto and mining sectors affected
  • Move highlights pressure on Russia’s war economy
  • Non-military sectors shrank 5.4% since January

From railways and automobiles to metals, coal, diamonds and cement, some of Russia’s biggest industrial companies are putting employees on furlough or cutting staff as the war economy slows, domestic demand stalls and exports dry up.

The efforts to reduce labour costs show the strain on Russia’s economy as President Vladimir Putin and the U.S.-led NATO military alliance square off in Ukraine, Europe’s deadliest conflict since World War Two.

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Russia’s Center for Macroeconomic Analysis and Short-term Forecasting - an influential research non-profit - said sectors of the economy not connected with the military had contracted by 5.4% since the start of the year. The Center forecasts a major slowdown in GDP growth to 0.7%-1.0% this year.

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Russia’s nominal GDP is now $2.2 trillion, about the same level it was in 2013, the year before Russia annexed Crimea.

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Russian Railways, which has 700,000 employees, has asked staff in its central office to take three additional days off per month at their own cost, in addition to normal holidays and non-working days, two sources told Reuters.

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Across plants in the metals, mining, timber and coal industry there have been cuts to the working week, staffing or production, according to industry sources and company statements.

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Signs of stress are appearing in Russian state statistics.

Overdue salary arrears in Russia at the end of August amounted to 1.64 billion rubles, an increase of 1.15 billion rubles, or 3.3 times, compared to the same period last year.

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The current economic strains have already forced the government to intervene across the economy, from shoe manufacturers to coal and metals, offering discounts on rail transport, deferral of taxes and targeted state support.

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In Russia’s vast steel industry, too, there are signs of trouble. Russia is considering a moratorium on bankruptcies in the metals industry and a host of other measures, according to a protocol from the government’s Financial Stability Commission meeting on August 28.

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