Russian businesses are slashing costs en masse amid calls from Putin
Russian companies have begun large-scale cost-cutting measures amid a deteriorating economic situation, falling profits, and high borrowing costs. This is evidenced by the results of a survey conducted by the Russian Union of Industrialists and Entrepreneurs.
According to the survey, in July 2026, 86% of companies reported cutting costs to “improve business efficiency.” This is the highest figure since the start of the full-scale war and is 21 percentage points higher than in April.
Representatives of large businesses cited non-payment by counterparties—which has reached approximately 9 trillion rubles in the Russian economy—as well as falling demand and a shortage of working capital as the main problems.
Due to the crisis, companies are forced to cut staff, postpone investment projects, and reduce production capacity. Layoffs have already been announced by VTB and Russian Railways, among others, while Rosatom has reported delays in the construction of nuclear facilities. Major metallurgical enterprises have also announced the shutdown of some of their facilities.
According to estimates by the Center for Macroeconomic Analysis and Short-Term Forecasting, civilian sectors of the Russian economy not linked to the military-industrial complex have contracted by 4.6%. For the second year in a row, corporate profits in the country have been falling.
Entrepreneurs cite the lack of prospects for an end to the war and fears of further escalation as key factors contributing to uncertainty. At the same time, Russia’s wealthiest individuals—particularly billionaires close to the Kremlin—are moving capital abroad instead of launching new investment projects.
High debt dependency has placed additional pressure on businesses. According to experts, on average, Russian companies allocate about 37% of their pre-tax profits solely to servicing debt. In a number of industries, the situation is even worse: in the railway, shipbuilding, and aviation sectors, the debt burden exceeds EBITDA by more than eight times.
The growing debt burden is already taking its toll on the banking system. According to the Central Bank of the Russian Federation, the share of non-performing loans has reached about 11% of the banking system’s assets, or approximately 11 trillion rubles.
Sberbank’s chief analyst, Mikhail Matviynikov, stated that the Russian economy is entering a period of “slow exhaustion,” during which companies are gradually losing their financial stability. According to him, this could result in a large-scale redistribution of ownership, with weaker companies being forced to sell assets to stronger players.
As a reminder, Russian grocery chains are bracing for the fallout following the attacks on Wildberries.
Earlier, the Russian online marketplace Ozon evacuated employees from its logistics center in Zelenodolsk (Tatarstan) due to the threat of an attack by Ukrainian drones. After the alert ended, the warehouse resumed normal operations.
On the morning of July 31, drones attacked a warehouse complex in Zelenodolsk (Tatarstan, Russia), where the logistics facilities of the Ozon and Wildberries marketplaces are located. Following this, a number of Ukrainian sources reported that strikes on Ozon warehouses might continue.
