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Russia’s Key State Bank Prepares Massive Layoffs Amid Economic Strain
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Russia’s primary state development bank, VEB.RF, is preparing to cut its workforce by 15% as the country’s economy faces mounting pressure.
The bank, which manages the pension savings of 38 million citizens and serves as a major financial arm for government national projects, aims to reorganize its operations to meet fiscal targets for 2027, according to The Moscow Times on June 2.
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Igor Shuvalov, the head of the institution, announced the planned reductions during a session of the Federation Council’s committee on economic policy.
He attributed the decision to the current environment of “credit cooling” being implemented by the central bank. “We already adopted an order 10 days ago, we started… in this time we are cutting 15%, cutting our organization’s budget in order to reach the set budgeting parameters for 2027,” Shuvalov stated.
The institution plans to continue these cost-cutting measures throughout the next year, with the scope of the reorganization expected to extend to its subsidiary structures. While VEB.RF reported a profit of 89.4 billion rubles ($894 million) for the previous year, this figure followed significant state support.
As reported by The Moscow Times, throughout 2025, the government injected 407 billion rubles ($4.07 billion) into the bank from the National Wealth Fund, utilizing both subordinated and standard deposits to maintain liquidity.
The move by VEB.RF reflects a broader trend of downsizing across major Russian industries, including banking, metallurgy, and automotive manufacturing.
Recent estimates from the firm Get Experts indicate that one-quarter of Russian companies implemented staff reductions last year due to the deteriorating economic climate.
Several other major entities have also initiated significant layoffs. The automotive manufacturer Kamaz, which recorded a 43 billion ruble ($430 million) loss last year, dismissed approximately 2,000 employees. Sberbank has reduced its staff by as much as 20%, while 13 other financial institutions have cut up to 40% of their workforce.
The metallurgical sector has also faced hardship, with some facilities, such as the Magnitogorsk Iron and Steel Works, struggling with losses after domestic demand for steel dropped by 15%, leading to thousands of job cuts.
Meanwhile, the Russian economy, previously resilient due to military-related demand, faced significant challenges as growth slowed sharply to 1% in 2025 and contracted by 0.2% in the first quarter of 2026.
Officials attributed this decline to high interest rates, Western sanctions, and a strong ruble, while persistent Ukrainian drone strikes against refineries and critical infrastructure further disrupted industrial capacity and threatened fuel stability.
As a result, many business leaders and analysts expressed skepticism regarding the government’s ability to stimulate recovery, noting that the traditional drivers of economic growth had effectively vanished.
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