Railway chief hopes to limit anti-crisis staff measures to reduced hours
MOSCOW. June 4 (Interfax) - The president of Russian Railways (RZD) , Vladimir Yakunin hopes that the company will not have to resort to mass layoffs.
"We are now forced to bring the number of employees in line with the scale of operations. It was good when there was a natural turnover, but now I have already told employees that I if the situation will continue to develop according to such a scenario we'll have to talk about actual downsizing. I hope, though, that this will be reduced employment," Yakunin said in an interview with Interfax.
RZD has launched a crisis management program due to the decline in freight shipments since the end of 2012. The company set up a crisis management commission that drafted a set of measures to cut expenditures and the scale of the cuts has changed along with the forecasts of the Economic Development Ministry, Yakunin said.
"Initially, we were supposed to reduce expenditures by 25 billion rubles, then by 50 billion rubles. Now there is altogether talk that we'll need to cut expenditures by the astronomical sum of 100 billion rubles. And this will require cutting into flesh," Yakunin said of the current situation.
He said the cuts would affect "many things," including track repairs, infrastructure and payroll. RZD management has essentially only agreed with the government to maintain the scale of its investment program because "it is a driver for the economy."
Yakunin said that for now the company sees the situation more as "critical in terms of management measures to balance RZD's budget" rather than "catastrophic." This balance will in part be achieved by increasing efficiency and labor productivity.
"For now the measures that we are taking are adequate for the situation on the market. But if there is a global economic deterioration, if Russian economic growth slows, then we'll have to think about additional measures," Yakunin said.
Earlier at a meeting with President Vladimir Putin, Yakunin reported that the decline in shipments would probably lead to layoffs. "For example, just in locomotive crews we have 2,800 extra people in relation to the volume of work," he said.
The company earlier cut expenditures on management personnel and first of all "restricted one-off incentives." Yakunin said bonuses were a "mechanism to stimulate improvement in the quality of work" and said they should be used only in exceptional cases.
Yakunin also ordered reduced spending on construction and installation work and communications. "Obviously, we can reduce expenditures not related directly to ensuring the safety of the transport process - business travel expenses, expenditures on communication services, general business expenses," he said, urging employees to maintain strict budget discipline.
However, he remarked that "we are not talking about an arithmetic reduction of expenditures."
"We need to thoughtfully approach this issue, so that by cutting expenditures we don't simultaneously reduce our own resources to increase revenues," Yakunin said, citing Europe, where a "severe focus only on reducing expenditures led to a decline in demand."
"We are being more flexible in this regard - there where it is necessary to cut, we are cutting, there where there is a need to increase investment, we will increase our spending," Yakunin said.
