Russian Railways (RZD) is preparing to reduce its workforce, according to Russian publication RBC. The company’s stated goal is to improve efficiency against the background of declining workloads and economic challenges.
The Russian publication says that it got its hands on an internal RZD order by CEO Oleg Belozerov, commanding the company to optimise its management staff and to adjust their numbers to the existing workload.
In addition, Belozerov ordered deputies and heads of departments to prepare proposals for staff reductions before 1 November. As a first measure, RZD will introduce hiring restrictions.
Just last year, talk surrounding RZD’s workforce centered around persistent staff shortages. The company did not have enough locomotive drivers and maintenance staff. By now, the situation has changed quite radically: the company is not looking to hire more people, but instead wants to shrink its management staff.
Challenging economic circumstances
In August, RZD started by forcing employees to take a couple of days of forced unpaid leave each month. That measure will last until the end of the year.
The problems at RZD have a lot to do with its financial obligations. The high interest rate in Russia has grown the rail operator’s debt payments significantly, the prime reason for a ninefold collapse in its net profit from 118,3 billion rubles in 2023 to 13,9 billion rubles in 2024.
Besides its debt obligations and the high interest rate, RZD also has to deal with a constantly declining freight volume. This is evidenced by the company’s monthly loading figures, which shows that Russian companies are putting fewer and fewer goods on trains, hurting RZD’s business.