According to a statement shared on social media by Severstal CEO Aleksandr Shevelev, the company will reduce certain expenditures during the year, while maintaining its commitment to production safety and stability. In this context, the maintenance fund will be cut by 14%, while capital expenditures will be reduced by 24%. At the same time, the company will continue to pursue its strategic projects, including the construction of an iron ore pellet production facility.
Significant cuts are also planned in administrative expenses. Salary-related costs will be reduced by 5%, primarily through a hiring freeze, reduced reliance on outsourcing by utilizing existing staff, and organizational measures. Shevelev noted that postponing salary increases is necessary to ensure the company’s sustainability in the coming months. Once the situation stabilizes, the issue will be reassessed at the end of the first six months.
Shevelev also stated that steel demand in Russia has declined by 31% since the beginning of 2024, leading to reduced capacity utilization among key customers and downward pressure on prices.
Meanwhile, the company’s social programs will be preserved. The “For Yourself” program, which includes employee health insurance, flexible benefits, and meal support, will continue to be implemented almost in full.
Earlier, Magnitogorsk Iron and Steel Works (MMK) also announced plans to reduce management staff by 10% and suspend production facilities operating at low capacity. MMK CEO Pavel Shilyaev stated that the plant’s capacity utilization stood at 70–80% in 2025, and that the company’s net loss reached approximately 15 billion rubles.
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