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Russian Warship Builder Stops Paying Workers Amid MoD Cash Freeze and Sanctions
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The Yaroslavl Shipbuilding Plant, a key Russian defense contractor, has reportedly failed to pay its workers for nearly two months.
Employees cite halted funding from the Russian Ministry of Defense as the main cause of the disruption, which has led to partial shutdowns of production facilities and forced downtime for staff.
According to The Moscow Times, workers confirmed that the last salary payments were made in late September.
Some employees, speaking to local outlet Soroka and Komsomolskaya Pravda, said they were promised full payment by October 23, but the funds never arrived. Management reportedly told employees that the Ministry of Defense had not transferred money for contracted work.
The plant employs around 850 people and produces both civilian and military vessels, including landing ships, patrol boats, and naval support vessels.
In 2024, the shipyard delivered a Project 02221 harbor patrol craft to Russia’s Pacific Fleet. However, ongoing financial issues have left many workshops idle. Workers have been sent home or placed on leave, with some invoking Article 142 of the Russian Labor Code, allowing them to suspend work due to non-payment.
Some employees filed complaints with Russia’s labor inspectorate, but responses indicated that wages were frozen due to tax-related account blocks. The company itself confirmed that it is waiting on funding from the Ministry of Defense to resolve the issue.
The Yaroslavl Shipbuilding Plant has been under international sanctions since 2019 due to its ties to Russia’s defense industry. These restrictions were tightened following the full-scale invasion of Ukraine in 2022, with additional sanctions imposed by the US, EU, Canada, Switzerland, Japan, and Ukraine.
Earlier in August, the brand-new Russian Navy tug Kapitan Ushakov (Project 23470) sank during final outfitting at the Baltic Shipyard in St. Petersburg. The pier was leased by the Yaroslavl Shipbuilding Plant, which was responsible for completing the vessel.
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