By Sultan Musayev | 2025-12-01

Russian workers face another year of pay cuts, shrinking job prospects and deeper austerity as businesses brace for worsening economic conditions. With demand falling and sanctions biting, companies plan to slash payrolls, freeze raises and cut costs across nearly every sector, leaving many with few options beyond military service.

A new survey by the financial service Aktion Finansy found that 38% of Russian companies expect to reduce payrolls next year, with about a third planning outright layoffs. Most employers aim to trim expenses more quietly: cutting bonuses, revising salary structures or shifting staff to part-time work.

Punishing job market

This latest round of belt-tightening continues a multiyear wave of streamlining. Many workers say the job market has become punishing.

"I was laid off last year and I still haven't been able to find a job with acceptable conditions," former Samolet Group IT specialist Ilya Zakharov told Kontur. "Many of my colleagues have the same problem." He said the labor market "is contracting more and more every year."

Marketing budgets are among the first targets. Half the companies surveyed plan to cut promotional spending, including custom-branded gifts, which 43% say they will eliminate.

About a third expect to skip trade shows and conferences or reduce spending on printed advertising. Nearly 30% will scale back or halt market research, while only 10% still expect to roll out new products.

Transportation will be another major area of retrenchment. About 39% of firms say they will optimize transport capacity, and 33% plan to tighten route planning, with stricter fuel controls becoming routine.

Companies also intend to curb spending on training, business trips and advertising, according to Aktion Finansy. Thirty percent expect to cut training budgets; 29% will limit travel; and 26% plan to reduce advertising outlays.

A quarter of respondents intend to shrink general business expenses. Smaller shares say they will avoid repairing assets that are not directly tied to production (22%), give up renting some facilities (18%) or halt automation projects (11%).

A separate RBC survey in September painted a similar picture.

Fifty-seven percent of companies said they expected further economic decline before year's end, and 62% reported that losses from Western sanctions had not been offset by increased activity in "friendly" markets. Nearly half of firms cut staff this year, while 90% were forced to seek new suppliers. Sixty-four percent said pressure from oversight bodies has grown.

At the same time, the "salary race" that briefly lifted wages early in the war is over, business media report. Kommersant wrote that raises next spring will likely stay below 10% and mostly for top performers. Companies raising pay for others will do so through targeted bonuses rather than higher base salaries.

Employers "simply can't offer large salaries," PR Inc. founder Olga Dashevskaya told Kommersant. "It's hard for them to pay this 10%: customer receipts aren't growing, and profits are falling. The workers aren't to blame. They also need to feed their families, and prices are going up everywhere."

Falling salaries

Some executives warn that salaries may fall outright.

Vladimir Antonov, executive director of CHETRA, said the market is already crowded with mid-level and junior specialists, making wage declines more likely.

"It's now essential to work with key employees," he said, according to Kommersant.

New taxes and continued sanctions add to the pressure, and analysts say companies are feeling the downturn more acutely as interest rates stay high.

Zhyldyz Aliyeva, an economics commentator for Kazakhstan's Delovaya Nedelya, told Kontur that Russia has entered a period of turbulence as rising costs, soft demand and falling profits force businesses to "scrimp on everything that is not directly related to survival."

She warned that sanctions imposed in October on Rosneft and Lukoil have yet to fully hit the economy.

"For a country where the budget hinges on income from raw materials, that spells a decline in currency earnings and economic catastrophe," she said.

Aliyeva expects the standard of living to fall sharply next year.

"Accelerated inflation will exacerbate the widespread job and salary cuts," she said. "The population will see its purchasing power slip further, and there will be fewer ways to offset the decline in income."

For many workers, the military may be the only employer still recruiting.

Volunteer bonuses that once reached into the millions of RUB have been cut sharply -- in some cases retroactively, according to media reports -- even as the government continues to push contract service for the war in Ukraine.

A new law signed in November allows the enlistment of reservists to guard infrastructure and factories from drones and sabotage. The roles are low-paid: reserve status pays 2,000–10,000 RUB ($20–$105) a month, and participation in training pays 20,000–50,000 RUB ($210–$525). Authorities say the reservists will not be sent to the front, but activists note the decree does not explicitly bar it.

Aliyeva said the economic picture will worsen as long as the war continues.

"The war has already depleted Russia's economy, and it's the population that's paying the price," she said.