Russia economy meltdown as industrial giants forced to furlough workers

Vladimir Putin could be staring down the barrel of economic ruin as major industries have begun putting workers on furlough or cutting staff as the war with Ukraine continues to hit Russia's finances hard. A huge nation rich in natural resources, Russia has previously enjoyed a constant running tap of revenue flowing from the sale of fossil fuels to Europe, India and China.

But as European countries seek to turn off their addiction to Moscow's oil and gas, and with China and India under pressure from the White House to do the same, even traditionally strong areas of Russia's economy are showing signs of severe strain. It's reported six huge companies in the mining and transport sectors have started to cut their working week in an effort to reduce their wage bills.

Cemros, the country's largest cement maker, has moved to a four-day week, so too has the massive Gorky Automobile Plant and the truckmaker Kamaz, which between them employ more than 50,000 people.Russia's banking sector, which has faced international sanctions, is also suffering with large market losses in recent months.

The Japan Times reports Cemros spokesperson Sergei Koshkin called the four-day-week "necessary anti-crisis measure" in the face of dwindling demand from the construction industry, adding: "The goal is to keep all our staff."

The company has 13,000 employees and 18 plants across Russia.

When Putin ordered the invasion of Ukraine in February 2022, the economy of Russia contracted by 1.4%, however, in 2023 it grew by 4.1% and then 4.3% in 2024, outperforming the average for the G7 group of leading industrialised nations.

Despite the surge, in 2025 the economy is predicted to drop to just 1% growth, around half that of the United States.

On the ground in Russia, another big firm, Alrosa, the world's largest producer of diamonds, said it had cut the payroll for staff not directly involved in mining by 10%. And Sveza, the country's biggest timber producer, said it had closed down production in a mill in Siberia which saw more than 300 people lose their jobs.

The coal industry has also been hit hard with 19,000 workers laid off in 2025. Alexander Kotov, a partner at Russian consulting agency NEFT Research, said: "If we don't start saving the coal industry urgently, it could be hit by a wave of crisis."