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Published in Stream:
Russia Update: April 6, 2015
Press by
The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Russian Defense Industry's Rostec to Lay Off 40,000 Managers
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In what seems like a sign of the growing economic crisis in Russia, Rostec (Rostekh) announced it will lay off 40,000 managers by the fall of this year, reported, citing a report in Kommersant.

Out of 85,000 managers, about 40,000 will be dismissed including half of the 620 employees at the head office. The rest will be made redundant by September-October 2015.

A total of 475,000 work in the company.

But Rostec said it wasn't making the enormous cuts because of the economic crisis, but due to "entering a new stage in the company's development." They said that using an outside consultant, they had conducted a staff audit and found some employees insufficiently qualified.

Rostec unites about 700 companies in the Russian defense industrial complex, says Kommersant.

Under Russian labor law, those dismissed will receive compensation and training for jobs in other areas.

Last year, AvtoVAZ, a company where Rostec owns shares, laid off 14,000 workers, Kommersant reported. This year the company plans to fire 1,100 managers due to the drop in demand for cars.

The announcement came after a statement by Aeroflot, the Russian airline, that 10% of the staff would be cut, and other announcements from various car manufactures that thousands of workers will be laid off. The news has already led to strikes in Kaluga which authorities have responded to by arresting or intimidating labor leaders.

Kommersant reports that sources in Rosneft say the company has decided to reduce its Moscow office by 20-25% , but this might refer only to a reduction in vacancies. Russian Railways said in March that 5,000-7,000 people may be let go (about 8%). The Chelyabinsk firm ChTz-Uraltrak, controlled by Uralvagonzavod may cut 6,000 employees (80%). Other machine-building plants say they may make reductions as well.

-- Catherine A. Fitzpatrick