Russia's Richest Businessman Slashes Investments And Prepares To Lay Off Employees
- 5.06.2026, 15:26
Mordashov entered the "negative cachet".
"Severstal has stopped hiring personnel and is considering layoffs amid the crisis in the steel industry, the company's majority owner and chairman of the board of directors Alexei Mordashov told RBC in an interview.
"We have stopped hiring new employees at Severstal. There may be talk of some personnel optimization," he said. Mordashov added that he was not yet ready to talk about the scale of these measures.
He said that also a month ago the company cut its 2026 investment program by 24% and plans to cut these expenses even more severely next year.
Mordashov, who is the richest Russian businessman with a fortune of $37 billion, complained about the sharp deterioration of Severstal's financial performance. Thus, the company's EBITDA margin since the beginning of the year is about 12%, whereas previously the norm was 30-40%. At the same time, Severstal is facing negative cash flow. "Our profitability has fallen radically. We have already entered negative cash. We spend more on investments than we earn," Mordashov admitted.
The key reason for these problems he called the drop in demand for steel products. According to the businessman, last year steel consumption in Russia fell by 14%, in the first 4 months of 2026 - by another 13%, and in total for three years - by 30%.
At the same time Mordashov complained that Severstal can not stop all current investment projects, despite the crisis in the industry. "We are already far into it, and in case of a freeze there will be a loss of what has been spent. Even technically it is very difficult to slow down when we are contracted, everything is already underway. We will probably have to pay for it," the businessman stated. He added that the prospects of metallurgy remain unclear: "What the bottom will be and when, I don't know".
From Mordashov's point of view, the Russian economy as a whole is showing signs of "hypothermia". Among them he named a slowdown in investment and a worsening situation on the labor market.
According to Get Experts, last year 25% of Russian companies laid off employees due to financial difficulties. Metallurgical plants were forced to lay off about 3,000 people after the collapse in demand for steel, and several large enterprises, including the Magnitogorsk Iron and Steel Works became unprofitable.
Up to 20% of employees were laid off by Sberbank, another 13 banks cut up to 40% of staff. In 2026, a wave of layoffs was launched by Yandex; about 2,000 employees were sent to the street by KamAZ, which made a record loss of 43 billion rubles last year.