Russia's industrial titans furlough workers as its war economy stalls

Economic Overview - Russia's nominal GDP stands at $2.2 trillion, similar to its level in 2013, prior to the annexation of Crimea [1] - The economy contracted by 1.4% in 2022 but is projected to grow by 4.1% in 2023 and 4.3% in 2024, with a forecasted slowdown to 1.0% growth this year [8] Sector Performance - Non-military sectors of the economy have contracted by 5.4% since the beginning of the year, indicating significant economic strain [2] - The construction industry is facing a downturn, with cement consumption expected to fall below 60 million tonnes, a level not seen since the COVID pandemic [5] Labor Market Adjustments - Major companies, including Cemros, Russian Railways, and GAZ, have implemented a four-day workweek to manage labor costs and avoid layoffs [6][12] - The unemployment rate has dropped to a record low of 2.1%, despite the economic challenges [8] Government Intervention - The Russian government has been compelled to provide support across various sectors, including coal and metals, to prevent mass layoffs and economic discontent [17][16] - In previous downturns, state support was extended to major employers, indicating a pattern of intervention during economic crises [16] Industry-Specific Challenges - The coal sector is particularly affected, with reports of 19,000 layoffs in the first half of 2025 and financial health deteriorating for many enterprises [18][19] - The steel industry is also under pressure, with discussions of a moratorium on bankruptcies and a quiet cutback in operations due to high interest rates and weak demand [21][22]