Oleg Deripaska’s metals-to-timber conglomerate Basic Element, or BasEl, has cut about 50,000 jobs since the crisis began last year, a company executive said Friday.
Deputy chief executive Andrei Yelinson said most of BasEl’s units began generating profits in July thanks to cost reductions and job cuts, and that he hoped to restructure the group’s multibillion-dollar debt by the end of 2009.
“We did employ more then 300,000 people. Now we estimate that we are still in that range with more than 250,000,” Yelinson said in an interview.
Russian companies are usually cautious when announcing staff cuts as the government of Prime Minister Vladimir Putin has made it clear that it expects them to swallow losses during the downturn and limit job cuts to avoid social discontent and mass unrest.
Russian Railways said in April that it might cut some 54,000 jobs, but since then it said it would scale down the cuts as the macroeconomic environment was improving.
The companies in which BasEl owns stakes have cumulative debts in excess of $20 billion. Earlier this month, the group told Reuters that it sought to delay repayment of its units’ principal loans to 2010.
“The restructuring, which has been a long process we started almost a year ago, is at its final stage. We hope to complete the whole process by the year-end,” Yelinson said.
“We see already some of the restructuring contracts finalized like in GAZ Group, where we’re already in the process of obtaining government guaranties.”
In early October, the carmaker agreed on restructuring with the last of its creditors, Alfa Bank, while agreements with other creditors had been reached in the summer.
United Company RusAl, in which Deripaska owns a controlling stake, accounts for some 80 percent of BasEl’s units’ debt.