Rostelecom to Layoff 10,000 Employees this Year

Russia's state controlled Rostelecom plans to layoff 10,000 people in the next year and it is believed that these cuts will continue for the next four years, according to company spokesman Andrey Polyakov.

The company plans to layoff 5-7 percent of  its workforce annually for better business efficiency.  The employment cuts could be a result of the slowing economy and the Western sanctions against Russia with the added woes of falling oil prices.

Russia's economy is expected to grow 0.3-0.5 percent this year, compared with 1.2 percent in 2013, reports the Wall Street Journal. This contrasts drastically to the 7 percent growth seen in the last decade in Russia with the aggressive rule under President Putin, the end of the world financial crisis and stable fuel prices.

Rostelecom chief executive Sergei Kalugin conveyed to clients this week that the telecom company "hopes the head count cut would help improve margins and offset declining revenue in the fixed line sector," reports the Wall Street Journal.

Rostelecom has around 157,000 staff members and the cuts will mainly cover management and employees reaching retirement age, the company said.

Russia's unemployment rate has hovered around 5 percent in the last few years. This is the second major job cut seen in the country's state run companies. Last year Russian Railways put a third of its employees on shorter work weeks.

Rostelecom is the biggest telecom company in Russia covering almost 34 million households. Its range of services include broadband, media streaming and it also provides technological solutions in the fields of E-government, cloud computing, healthcare, education, security and housing & utility services.

The Group's consolidated revenue for the third quarter of 2014 was RUB 75.5 billion or $1.5 billion, according to the company website.