The giant Russian oil company Gazprom is facing financial difficulties as a result of Moscow’s aggression against Ukraine, forcing it to make a 40% cut in staff at its offices in St. Petersburg, a spokesman for the group told the French news agency today.

The announcement comes two weeks after transit of Russian gas through Ukraine was halted, in a decision by Kiev aimed at curbing Moscow’s revenues after three years of war.

According to a letter sent to Gazprom CEO Alexei Miller and published by local media, deputy chairman of the board Yelena Ilyuhina proposed reducing Gazprom’s management staff from “now 4,100” to “2,500 people”.

Asked by Agence France-Presse (AFP), Gazprom’s communications officer Sergei Kurpinyanov confirmed the authenticity of the letter without going into further details: “Yes,” he said simply, adding: “We do not comment on internal procedures.”

In the letter, Ms Ilyuhina said that “the challenges facing the Gazprom Group require a reduction in the preparation and decision-making time”. The proposed layoffs will not affect employees at the production facilities.

Gazprom, the flagship of the Russian economy headed by Alexei Miller, a very close friend of Vladimir Putin, has had to deal with a sudden drop in demand in the European market from 2022 due to the war. In 2023, Gazprom, which has a monopoly on Russian gas exports, recorded a net loss of nearly seven billion dollars, the first time this has happened in more than twenty years.

The bad news has been piling up for the group over the past three years: after the termination of deliveries to Germany following the Nord Stream sabotage in the Baltic Sea in September 2022, the transit of Russian gas through Ukraine was terminated on January 1.

According to experts quoted by the Russian newspaper Vedomosti, Gazprom will lose about €5 billion in annual revenue from deliveries through Ukraine, an amount equivalent to about 6% of its turnover.

At this stage, only the TurkStream undersea pipeline in the Black Sea remains to supply Europe with Russian gas via pipeline. And the European Union has already said it wants to get rid of gas from Russia by 2027.

US sanctions against Gazprombank, the group’s financial arm, also have a direct impact on Gazprom’s finances. On Friday, Washington and London imposed sanctions on its oil subsidiary GazpromNeft, which the company called an “unjustified and illegal” decision.