Efforts to cut labor costs show the pressure the Russian economy is under as President Vladimir Putin and the U.S.-led NATO military alliance wage conflict in Ukraine, Reuters reports.
Reuters identified six companies in Russia's mining and transportation sectors – many of them industrial giants – that have shortened the working week in an attempt to reduce wages without increasing unemployment, industry sources said.
One of them is Cemros, the largest cement producer in Russia. The company introduced a four-day working week until the end of the year to maintain employment amid a sharp slump in the construction industry and an increase in cement imports.
“This is a necessary anti-crisis measure,” said Cemros spokesman Sergei Koshkin. The company employs 13,000 people. people and has 18 plants throughout the country.
The Russian economy is in trouble
The drive to reduce wage costs shows how the conflict in Ukraine and Western sanctions are taking a toll on Russian industry and workers in heavy industrial plants, many of which were established during the Stalinization of the USSR economy in the 1930s.
Russia's Ministry of Labor and Industry did not respond to Reuters requests for comment. The agency reported in January that Putin is increasingly concerned about distortions in the economy, including the impact of high interest rates on non-military sectors.
The Russian Center for Macroeconomic Analysis and Short-Term Forecasts – an influential think tank – reported that non-military sectors have shrunk by 5.4% since the beginning of the year. The Center forecasts a sharp slowdown in GDP growth to 0.7-1.0%. this year.
