Russian car giant to slash 27,000 jobs

RUSSIA’S biggest car manufacturer AvtoVAZ announced last week that it is cutting a quarter of its workforce.

The Russian marque, which builds cars under the Lada brand and is 25 per cent owned by Renault, said in a statement released last Thursday: “Today, 102,000 people work at AvtoVAZ. Such a number cannot guarantee effective and profitable production. Therefore, we have agreed to reduce the personnel by 27,600 people.”

Most of the AvtoVAZ workers are at its plant in Togliatti, south-east of Moscow. The company was reportedly considering a workforce reduction of 36,000 employees but was able to “significantly lower the initial figure”.

About 5000 of the 27,600 jobs are white-collar positions.

"The enterprise is working on one shift and at 65 per cent of capacity,” the company said. “Cutting personnel is essential in such a situation.”

Overseas reports indicate that Lada sales are down 40 per cent year-on-year after the rapidly growing Russian car market stalled in 2008. A day after the job cuts were announced, news agency Reuters reported that AvtoVAZ had plans to assemble cars for Renault alliance partner Nissan by 2012.