Uralvagonzavod Restructures Amidst Economic Strain

Uralvagonzavod (UVZ), a Russian tank and railcar manufacturer, is restructuring its operations to cut costs, potentially reducing its workforce by up to 10%. The move comes as demand declines due to disrupted exports and a slower war economy. Despite changes, UVZ continues intense work on defense orders.

Uralvagonzavod (UVZ), renowned as a giant in Russian tank and railcar manufacturing, announced a strategic restructuring on Friday intended to mitigate costs. This follows reports of a potential reduction in workforce by up to 10% in response to declining demand.

Situated in Nizhny Tagil, the UVZ factory has faced Western sanctions due to its role in supplying tanks for the ongoing conflict in Ukraine. The state-run plant produces T-90M battle tanks and upgrades T-72B3M tanks. Local media outlet E1 cited an internal document revealing UVZ's plans to implement workforce cuts by February next year and to halt new hires.

UVZ confirmed to Reuters that it is restructuring to optimize management expenses while maintaining a high operational pace to meet state defense obligations. Some workers have been shifted to a four-day workweek, reflecting a broader industrial trend as major Russian companies grapple with stalling domestic demand and export disruptions.

(With inputs from agencies.)