Since the beginning of the year, over 100,000 Russian workers have been placed on reduced hours or unpaid leave, President Vladimir Putin stated on Tuesday, highlighting a concerning rise in what he termed “hidden unemployment,” despite the country’s official unemployment rate remaining at an unprecedented low.
During a meeting at the Kremlin focused on economic matters, Putin noted that the number of workers in such precarious situations—whom he referred to as “at risk of dismissal”—has nearly doubled over the past seven months.
“At the start of the year, approximately 98,000 individuals were in this position; by late June, this number increased to 153,000, and by August 8, it had escalated to 199,000,” he informed those present, as noted in a transcript made available by the Kremlin.
Although the official unemployment rate in Russia stands at 2.2%, the president emphasized that the latest data reflects a troubling trend that requires policymakers to address swiftly to prevent “cooling the economy.”
Among those present at the meeting were Prime Minister Mikhail Mishustin, Central Bank Governor Elvira Nabiullina, Economy Minister Maxim Reshetnikov, Finance Minister Anton Siluanov, and presidential aide Maxim Oreshkin.
This increase in underemployment is primarily occurring as major manufacturers, especially in the automotive industry, react to decreasing demand and rising borrowing costs by scaling back working hours.
This summer, several of Russia’s largest automobile manufacturers—including KamAZ, the GAZ Group, and AvtoVAZ—announced a transition to a four-day workweek.
In late July, the Likinsky Bus Plant, part of the GAZ Group, also reduced its hours, while the Pavlovsky Bus Plant temporarily ceased operations due to declining sales.
The economic slowdown is extending beyond the automotive sector. Cemros, the nation’s largest cement producer, managing 18 plants across the country, intends to implement a shortened workweek starting October 1.
State rail monopoly Russian Railways is also facing challenges, as the company has begun sending central office staff and employees from several regional divisions—including the Moscow, October, and Northern lines—on unpaid leave for two days each month until the year’s end.
Sources informed the business daily RBC that without these measures, the company would have been compelled to conduct mass layoffs. Russian Railways is experiencing its most substantial decline in cargo volumes ever, worsened by costly credit.
Putin mentioned that the officially registered unemployed has seen a slight increase, from 274,000 in January to 291,000 by the end of June, and reaching 300,000 in early August. He called on ministries, regional authorities, and business associations to work closely together to tackle these emerging issues.
“Maintain constant communication with business groups, entrepreneurs, and company employees,” he advised officials. “Assist them in resolving challenges and addressing the needs of enterprises, businesses, and their workforces.”
