Over one hundred thousand Russians relocated abroad due to economic difficulties
In a bid to cope with slumping demand and escalating borrowing costs, major manufacturers in Russia, particularly the automotive sector, have resorted to reducing working hours and unpaid leave for employees, leading to a nearly doubling of hidden unemployment within seven months in 2025.
Hidden unemployment, a situation where workers are technically employed but receive reduced hours, lower pay, or unpaid leave, has now affected around 199,000 people, according to President Vladimir Putin. This figure contrasts sharply with the official unemployment rate, which remains at a record low of 2.2%.
President Putin and economic officials view this trend as a warning sign, requiring early intervention to prevent further economic deterioration. Hidden unemployment masks the real level of joblessness and labor underutilization, creating a misleading impression of a stable or low unemployment rate while the economy is experiencing labor market distress.
The rise in hidden unemployment is primarily attributed to economic pressures on key industries rather than demographic or structural labor market changes. Despite this, broader economic risks such as inflation and regional inequalities persist.
Several notable companies have already implemented a 4-day workweek in response to the situation. KamAZ, GAZ, and AvtoVAZ have made this shift, with LiAZ following suit in late July. However, some companies like the Pavlovsky Bus Plant have had to halt production due to the drop in demand.
In an effort to address the emerging issues, employees in the central apparatus and road management, such as Moscow, October, Northern, and others, have been ordered to take two unpaid leave days each month. President Putin has also urged relevant ministries, agencies, and regional authorities to maintain constant contact with businesses and assist in resolving any emerging issues.
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[2] Russian Railways has sent its employees on unpaid leave until the end of the year due to a historic drop in cargo transportation and high loan costs.
[3] Russian President Vladimir Putin announced that over 100,000 citizens have been placed on idle time or moved to part-time work since the beginning of the year.
[4] The Kremlin has summoned Russian Prime Minister Mikhail Mishustin, Central Bank Governor Elvira Nabiullina, Ministers of Economic Development and Finance Maxim Reshetnikov and Anton Siluanov, and Presidential Aide Maxim Oreshkin.
[5] Several automakers in Russia have announced a shift to a 4-day workweek this summer.
- The escalating economic pressures on various industries, such as finance, business, and automotive, have led to employers, like Russian Railways, resorting to unpaid leave for employees to cope with slumping demand and high loan costs.
- Acknowledging the growing concern, President Putin has summoned crucial economic officials, including the Ministers of Economic Development and Finance, to maintain constant contact with businesses and assist in resolving any emerging issues in these critical sectors, including finance, business, and industry.
