Yandex at the center of controversy over rumors of mass layoffs
Russian tech giant Yandex has faced reports about a planned wave of layoffs and the possible closure of several unprofitable business units.
According to Kommersant, the company was reportedly preparing to let go of several hundred employees in its key “Search Services and AI” department, which generates about one-third of the holding’s total revenue.
The optimization was attributed to a sharp deterioration in financial performance: despite overall growth in the group, the search segment’s development slowed sevenfold, and six of the twelve main business directions, including e-commerce and autonomous technologies, became deeply unprofitable.
However, shortly after these reports, Yandex’s press service issued an official denial, calling the information about mass layoffs false. The company assured that it is not reducing staff and continues to expand, having increased headcount by 9% over the past year. Management emphasized that over a thousand vacancies are currently open, and structural changes concern only the reallocation of resources—for example, shutting down the secondary service “Yandex Vzglyad” to focus on higher-priority projects.
As Russia struggles to maintain stability in its IT sector amid isolation, conflicting signals from the market’s largest player indicate serious pressure on profitability. Experts note that even without mass layoffs, Yandex must practice strict cost control and discontinue projects that do not generate immediate revenue. Cost-cutting of 10–15% is becoming a general trend among Russian tech companies, as the domestic market offers increasingly limited free capital for innovation.
After three years of unexpected economic growth, Russia is now experiencing a sudden slowdown—war expenditures, inflation, and falling oil prices are weighing on an economy that until recently seemed resilient to sanctions.
The UK intelligence community also notes that Russia’s demographic crisis is deepening due to the full-scale war against Ukraine, mass emigration, and significant combat losses. Efforts by the Kremlin to stimulate birth rates are unlikely to stop the population decline in the near term.
