Western exodus could cost Moscow 200,000 jobs, mayor says

The city’s mayor, Sergey Sobianine, said in a blog post on Monday that 200,000 people were at risk of losing their jobs. Authorities were setting aside 3.36 billion rubles ($41 million) to support them, he added.

Dozens of Western companies left Russia or suspended operations in the country after President Vladimir Putin ordered the invasion of Ukraine in late February. Businesses have been sold, offices closed and production of everything from beer to cars halted.
Dozens of them, including McDonald’s (MCD) — which employs 62,000 people in the country — promised to continue paying their workers, at least for a limited period of time.

Swedish group Ingka, owner of retailer IKEA, has 15,000 employees in Russia. A company spokesperson told CNN Business last month that it has guaranteed three months’ pay to its employees.

Still, it’s unclear how long companies can maintain support. Sobyanin said the Russian government is stepping in to help workers left behind.

“The [support] program is aimed at employees of foreign companies who have temporarily suspended their activities or decided to leave Russia,” he said.

According to the mayor, the aid plan includes training, employment in temporary and public works, and incentives for organizations and businesses hire workers whose companies have left.

Western sanctions have hobbled Russia’s economy and pushed the country to the brink of its first foreign debt default in more than a century. Inflation has soared and economists predict a deep recession.
Lacking access to around half of its foreign exchange reserves – now frozen under sanctions – Russia has tried to pay in rubles, not the dollars stipulated in the contracts, two bonds maturing in early April, announced on Friday rating agency Moody’s. Russia has until May 4 to meet its obligations or it could be considered in default, the agency said. S&P has already called on Russia to “selectively default” on these bonds.
Last week, US Treasury Secretary Janet Yellen skewered governments and companies that have maintained ties with Russia.

“Let me now say a few words to the countries that are currently on the sidelines, perhaps seeing an opportunity to be gained by preserving their relationship with Russia and filling the void left by others. Such motivations are short-lived. view,” she said in a speech to the Atlantic Council.

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