Moscow has approved plans by AvtoVAZ to cut its work force by 25%, according to business daily Vedemosti.
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The newspaper reported that the Russian government delayed approving the plans for a month because of fears of public unrest.
But now the plans to shed 21,000 workers – reducing the workforce to 71,000 – have been approved by first deputy prime minister Igor Shuvalov on the grounds that the near-bankrupt carmaker, in which Renault has a 25% stake – must cut those jobs to become more efficient. He had previously been opposed to the cuts.
The vast majority of AvtoVAZ workers live in Togliatti – a one industry town that only exists to serve the plant. Redundant workers will be given government help until they can find new jobs.
Many analysts think the cuts won’t be deep enough; AvtoVAZ had previously wanted to axe 27,000 workers and has repeatedly warned that it faces bankruptcy.
