Putin adviser warns of crash after major firm cuts jobs by 50% | World | News
A Russian defense executive has warned that the country’s economy faces a 1990s-like collapse. Following the collapse of the Soviet Union in December 1991, the Russian government implemented a shock therapy economic program as the country transitioned to capitalism.
The consequences for ordinary Russians were disastrous, as the economy contracted by almost 50% between 1991 and 1997 and hyperinflation destroyed bank savings. As grocery prices soared and wages remained stagnant, ordinary people struggled to put food on the table. Vladimir Putin has masterfully evoked memories of the painful transition years to increase support for his domestic and foreign policies.
But Russia’s economy has been under great pressure from the demands and sanctions imposed by the ongoing war in Ukraine.
The Russian President is currently facing his own economic crisis that could be as severe as the crisis Russia experienced in the 1990s.
Alexey Chadayev is a former advisor to the Russian parliament and an executive at a defense firm.
In an interview with a Russian military blogger, he warned that Russia faced a repeat of Yeltsin’s early years.
“The real sector of the economy, again with the exception of those who work in the defense industry in one way or another, is in a very gloomy situation because money has become expensive,” he explained.
“Devaluation is increasing, costs are rising and there is no access to affordable credit. Everyone is facing cash flow shortfalls and we are seeing the return of barter agreements, just like in the forgotten days of the 1990s.”
But even defense firms seem to be feeling the pressure; some are preparing for major layoffs.
Russia’s largest railway rolling stock manufacturer and the army’s main supplier of tanks is embarking on a wave of major personnel cuts, local media reported.
Uralvagonzavod plans to lay off 10% of its workforce by February 2026 and will also halt the hiring of new employees.
The scale of redundancies for some departments will be “up to 50% of full-time staff”.
