Russian Factories Go Quiet

Major Russian companies are reducing working hours, sending employees on unpaid leave, and in some cases laying off staff as demand for civilian products falls, according to a report by the independent outlet Novaya Gazeta Europe.

Rostec, the country’s largest defense conglomerate, continues to expand its production of military equipment. But demand for its civilian goods, such as freight railcars, has plunged. Uralvagonzavod, a Rostec company, has shifted part of its railcar production to a four-day workweek and reduced salaries.

“I’ve worked in the shop for 15 years. Yesterday we were shown our new payslips, people are in shock,” said Sergei, a Uralvagonzavod assembly worker. “Salaries are around R15,000 (around $190), and they’re going even lower.”

At the Chelyabinsk Electrometallurgical Plant, employees have been on a four-day work week since September. Management cited currency fluctuations, weak export revenues, and declining demand for ferroalloys. The change affected about 1,200 workers.

“One less workday a week means losing 20 to 25 percent of your salary,” employees told the outlet. “People are unhappy, but they complain quietly, behind closed doors.”

Other large industrial producers have followed suit. In March, Uralasbest in Sverdlovsk Oblast switched to a three-day work week. The Serov Ferroalloy Plant and Zlatoust Metallurgical Plant also reduced working hours due to falling demand.

Russia’s major automakers (AvtoVAZ, GAZ, and KamAZ) have introduced four-day workweeks. GAZ said the decision followed a market decline of up to 60 percent in bus sales and 40 percent in medium-truck sales in the first half of 2025, driven by high interest rates and limited financing options.

KamAZ cited a 60-percent contraction in the heavy-truck market. AvtoVAZ began its shortened schedule in late September, which may last up to six months. “I make about R50,000 (Nearly $650),” said Nikolai, a factory worker. “Engineers earn a bit more, but salaries haven’t really grown in years.”

Many AvtoVAZ employees are nearing retirement age. “No one wants to work for this money,” Nikolai said. “People are lining up to quit, some go to defense factories, others to small repair shops.”

According to Reuters, reduced workweeks, unpaid leaves, and layoffs are spreading across industries from railways and automotive to metallurgy, mining, diamonds, and cement production. The impacts on workers are the results of an economy stalling as Russia's full-scale invasion of Ukraine grinds on.

Cemros, Russia’s largest cement producer, has also shortened the workweek through year’s end to avoid layoffs amid a construction slowdown and rising cement imports. The company employs 13,000 people at 18 plants and over 30 quarries.

RZD, Russian Railways, one of the country's largest employers, with 700,000 staff, has asked office employees to take three unpaid days off each month. Freight traffic fell 6.7 percent from January to September compared with the same period last year. Nearly all cargo categories, like coal, oil products, cement, and grain declined. Diamond giant Alrosa cut salaries by 10 percent and halted operations at two mines.

In September, plywood manufacturer Sveza closed its Tyumen plant, laying off 323 workers. The coal sector, employing around 150,000 people, has also been hit hard. Deputy Prime Minister Alexander Novak warned President Vladimir Putin in April that 30 coal companies, with about 15,000 workers and 30 million tons in annual output, are at risk of bankruptcy.

In the coal-mining Kemerovo Oblast (Kuzbass), 25 percent of investment projects have been frozen or delayed, and 18 of 151 enterprises have shut down since the start of the year. 

“My son-in-law works at a coal mine. People haven’t been paid for months, and almost everyone has loans or mortgages,” one social media user wrote. “They tell you to quit, but where can you go?”

Economist Igor Lipsits told Novaya Gazeta Europe that few civilian industries in Russia are doing well. He compared today’s situation to the 1990s, when companies kept workers on reduced schedules instead of firing them outright.

“Unemployment in Russia is often hidden,” Lipsits said. “People say they’re still employed, even if they haven’t been paid for months.”

He added that the government and corporations want to project economic stability, making layoffs politically undesirable. “This can go on until enterprises go bankrupt,” Lipsits said.