16 Nov 2022 17:51

Toyota begins laying off employees at Russian plant

ST. PETERSBURG. Nov 16 (Interfax) - Japanese automaker Toyota's Russian plant (Toyota Motor LLC, St. Petersburg) has begun laying off employees.

The St. Petersburg Labor and Employment Committee's press-service told Interfax that the company has currently laid off 1,937 employees. At the same time, according to the company's estimates, the total number of employees at Toyota Motor LLC as of September this year was 2,350 people.

"Terminations by mutual agreement began Nov. 14. Toyota has made a personal offer to each employee, which includes payment of 12 average salaries, preservation of voluntary health insurance for a year after dismissal, compensation for training, retraining, and professional development of up to 50,000 rubles," the committee said.

Earlier it was reported that Toyota Motor will begin laying off employees at the St. Petersburg plant in November-December. Dmitry Cherneiko, head of the St. Petersburg Committee for Labor and Employment, said that most of the employees will be dismissed by mutual agreement of the parties and not under a redundancy procedure.

The Russian Industry and Trade Ministry announced at the end of September that Toyota Motor LLC would completely stop producing cars at its plant in St. Petersburg. The automaker pledged to retain after-sales service of Toyota and Lexus cars, as well as support of the dealer network.

In Q2 financial statements, Toyota estimated the costs associated with termination of production in Russia at 97 billion yen (more than $650 million at current exchange rates). The company's chief accountant Masahiro Yamamoto clarified during a press briefing that the corresponding "amount of losses incurred in the first half of the year includes expenses for dismissal of departing employees and expenses due to impairment of assets."

The Russian representative office of Toyota (Toyota Motor LLC) was registered in 2001. The company's branch is the Toyota plant in St. Petersburg with an annual capacity of 100,000 cars. The plant was commissioned at the end of 2007 and manufactured the RAV4 and Camry models under a SPIC with the Russian Industry and Trade Ministry. Total investments by Toyota under the contract were envisaged at 20 billion rubles.

According to Association of European Businesses (AEB), Toyota sales in Russia in January-October 2022 decreased by 78.2%, to 21,205 units. The market share of the group decreased by 3.4 p.p., to 4.2%.