Gazprom to Cut Hundreds of Jobs at Head Office Due to Declining Revenues

amsterdam - Russian state-owned company Gazprom is reportedly planning to reduce hundreds of jobs at its head office in St. Petersburg due to disappointing revenues.

According to an internal memo, Gazprom, once the dominant supplier of natural gas across Europe, is set to decrease the number of employees at its Lakhta Tower headquarters from over 4,100 to around 2,500. The memo, sent by deputy director Elena Ilyukhina to CEO Alexey Miller, has been confirmed by Gazprom, though the company has declined to provide further comments.

Some of the staff may be transferred to other Gazprom units or subsidiaries, as indicated in the memo.

The Gazprom Group, which includes all oil, gas, and electricity companies, reported over 498,000 employees by the end of 2023 and manages 17% of the world's natural gas reserves.

The downsizing at the prestigious St. Petersburg headquarters contradicts Moscow's portrayal since the invasion of Ukraine. President Putin claims that the profits from oil and gas sales have only increased in value since the sanctions imposed after the 2022 invasion. Natural gas prices have tripled since then.

Until the end of last year, Europe received 5% of its usual orders of Russian Gazprom gas via land pipelines. However, there has been a slight increase in shipments of liquefied natural gas (LNG) via sea routes using chartered tankers sailing under different flags. More consignments have also been unloaded in Rotterdam ports, causing concern for the government.

In 2023, Gazprom reported its first annual net loss in 24 years, totaling 629 billion rubles, approximately €6.5 billion at that time's exchange rates. Since then, Gazprom has expanded its market share in Asian countries not adhering to the sanctions against Russia.

In 2024, Russian income from its vast fuel reserves decreased by 5% annually. Gazprom claims a 9% annual revenue increase from pipeline gas. In December, the company announced a 4% rise in fuel revenues compared to November, amounting to €652 million monthly after two months of decline.

Gazprom generated €54 billion in revenue in 2023. The setbacks could worsen as ten EU countries have urged other member states to completely ban the import of gas from pipelines and liquefied natural gas from Russia.

Brussels is reportedly contemplating stricter sanctions against Moscow, marking the sixteenth consecutive package of measures. Since the invasion, Gazprom's stock has lost 40% of its value on the Russian market.