Russian companies warned of mass layoffs

By the end of the year, the number of jobs may decrease by 2 million

Every fourth worker of small and medium-sized businesses in 2022 has already been left without work. According to surveys of recruitment agencies, many domestic firms turned on the savings mode in the winter and began to reduce staff. Large companies are already ready to apply a similar practice. As a result, an increase in unemployment and personnel strengthening of the “gray” labor market will follow. Those who can keep their jobs will also suffer – they will have to forget about salary increases for a long time.

The situation on the labor market in Russia, especially in the business sector of the “middle hand”, inspires serious concern. According to a survey conducted by the financial service Platforma and the Sravni marketplace, just under 20% of small firms have outsourced some types of work, another 26% have reduced employee bonuses, and about a quarter of employers have fired part of the staff. Such measures were due to falling revenues, as well as the lack of new orders and a shrinking customer base.

According to former Deputy Minister of Labor Pavel Kudyukin, the result of the negative phenomena that small and medium-sized businesses are now facing will be a noticeable increase in both real and registered unemployment. “As a result, the burden on the budget will increase, which will have to increase deductions for the payment of benefits. Although the size of such subsidies in our country is at a beggarly level, nevertheless, the state will be forced to financially support a significant proportion of the able-bodied population, since most of our compatriots do not have other income than salaries, ”the expert notes.

According to the Central Bank, at the moment the unemployment rate in Russia is at a record low level – only 3.9%, which is even less than in January. At the same time, the regulator warns that in June 2022, employers’ need for new employees decreased by more than 15% compared to the same period last year. For clarity, it is worth citing absolute figures: the number of vacancies in the labor market fell from 2.1 million to 1.8 million people, and such a deplorable trend was observed only at the height of the first wave of coronavirus in the spring of 2020.

Another negative effect that the domestic labor market will experience will be the growth of the “gray” sector of employment, the share of which will increase in proportion to the number of people who have lost their jobs. There are fears that towards the end of the year the number of personnel hired without official registration will also approach the pandemic level, when every tenth Russian worker received a salary in an envelope.

“Employees who will keep their jobs will also be at risk,” continues Kudyukin. – Not only small and medium-sized, but also large private corporations will begin to gradually cut staff salaries or will raise the issue of terminating the employment contract. Already, a number of industrial enterprises, in particular in the automotive industry, in a private setting, offer their employees to write statements of their own free will with the payment of a “golden parachute”. Such compensation does not exceed three months’ salary of the employee. They are easy to spend, but it will be extremely difficult for a person to find a job in the future.”

Estimates by independent experts are even more categorical. Thus, according to the calculations of the specialized agency ANCOR, by the end of this year, the number of jobs in Russia may decrease by 2 million, which will lead to an increase in unemployment up to 7.8%, and this situation in the domestic labor market will continue for several years.

Indeed, while the future does not inspire confidence. The instability of the country’s economic situation, associated, among other things, with personnel circumstances, has already forced a third of companies to reduce the amount of work, which led to a decrease in cash turnover from 10 to 50%. “It is still possible to solve the problem of unemployment somehow,” says investment strategist of Arikacapital Management Company Sergey Suverov. – In extreme cases, people can go to work with a lower salary, although because of this, the threat of a social explosion may escalate – few people will want to give up the position of an engineer in favor of the rate of a handyman. However, there is another factor of concern. The Russians are at risk of losing their jobs due to the lack of the necessary equipment, which was previously supplied by foreign manufacturers. Already existing units will gradually go into scrap without being replaced by new capacities. Roughly speaking, the working hands will remain, but there will simply be no place for qualified personnel to apply their professional skills.”

Published in the newspaper “Moskovsky Komsomolets” No. 28840 dated August 5, 2022

Newspaper headline:
The business has reached the point of layoffs