The collapse of Gazprom’s exports to Europe – down over 90% -- is forcing the Russian gas giant to slash jobs and sell off assets.
Since Moscow’s full-scale invasion of Ukraine three years ago, Gazprom is likely the Russian company hit hardest by international sanctions.
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Reuters, citing top managers and employees, reports that Gazprom has already eliminated its entire export division staff and plans to sell the division’s headquarters. The company is preparing to lay off up to 40% of its workforce at its St. Petersburg headquarters in the Lakhta Center.
Gazprom Export, once the company’s elite and most lucrative division, is now “only a shell,” according to a company insider quoted by Reuters. Of the 600 employees who worked there five years ago, only a few dozen remain, primarily handling lawsuits from former European clients who are seeking over €18 billion in damages.
To cut costs, Gazprom is considering selling luxury real estate, including the export division’s office – an Italian palazzo-style building constructed in 2014.
Chairman Alexei Miller has approved plans to cut 1,500 jobs at the head office, two sources told Reuters. While no official layoffs have been announced, employees have reportedly been asked to present reasons why they should keep their jobs.
In 2023, Gazprom suffered a record loss of 629.1 billion rubles ($7.3 billion). Despite reporting a profit of 989.9 billion rubles ($11.6 billion) for the first nine months of 2023, the company’s gas business remained in deep financial trouble, losing about 500 billion rubles ($5.8 billion) in the first half of the year, according to the Economic Pravda media outlet.
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US considers possible cooperation with Gazprom
Amid Gazprom’s crisis, Bloomberg reports that the US is studying potential cooperation with the Russian gas monopoly.
Preliminary contacts have allegedly taken place between American and Russian representatives, though it remains unclear who is leading these discussions or whether the administration of Donald Trump is directly involved.
According to Bloomberg sources, US cooperation with Gazprom could be part of a broader strategy to weaken Russia’s ties with China and Iran. However, unnamed European officials are skeptical about the deepening partnership between Moscow and Beijing.
Gazprom is particularly interested in US support for restoring the Nord Stream pipeline. If successful, such a deal would mark a major reversal for Trump, who, during his first term criticized Europe’s reliance on Russian gas and pushed for greater US LNG sales to the region.
European market outlook
Despite speculation, Reuters reports that Europe is unlikely to re-embrace Russian gas. The Financial Times revealed that a long-time Putin ally is lobbying Washington to allow investors to restart the $11 billion Nord Stream 2 pipeline.
However, Germany has reaffirmed its commitment to energy independence, and even if demand existed, Nord Stream remains out of service and partially damaged.
Shell’s executive VP for integrated gas, Cederic Cremers, remarked in February that the return of Russian pipeline gas would depend on “a lot of things,” including ongoing arbitration cases and whether Europe is willing to renew its dependence.
Gazprom’s share of the EU gas market has collapsed from over 35% to just 7% since sanctions took effect, according to European Commission data.
Its market capitalization now stands at roughly $46 billion—a fraction of its all-time high of $330.9 billion in 2007, according to Moscow stock exchange figures and Reuters calculations.