Moscow Mayor Warns Threat of Losing 200,000 Jobs Amid Russia-Ukraine War: Here's Why

According to the city's mayor, some 200,000 foreign company employees in Moscow may lose their employment as a result of sanctions related to Russia's military assault in Ukraine.

He said that the Russian government had authorized a $41 million scheme to boost jobs in the Russian capital just last week. Following President Vladimir Putin's deployment of soldiers to Ukraine on February 24, hundreds of mostly Western corporations have declared the suspension or exit from Russia.

Almost 200,000 People at Risk of Losing Jobs in Moscow

According to Sobyanin, the newly authorized initiative will help around 58,000 people who have lost their work. He stated that about 12,500 of them will be retrained, as per The Strait Times.

People in between employment will be provided opportunities to volunteer with a variety of civic groups, parks, and other locations, according to Sobyanin. Economists predict that the worst of the economic consequences of the crippling Western sanctions are still to come and that Russia will enter a profound recession.

Meanwhile, Central Bank Governor Elvira Nabiullina indicated that Russia intends to take legal action against the freezing of gold, currencies and assets belonging to Russian citizens, but that such a move would need to be carefully considered and legally justified.

Foreign sanctions have blocked around $300 billion of Russia's gold and FX reserves, which totaled around $640 billion when it started its "special military operation" in Ukraine. According to the mayor, the assistance plan includes training, employment in temporary and public works, and incentives for organizations and firms to hire workers whose companies have left.

Western sanctions have hobbled Russia's economy and pushed the country to the brink of its first default on foreign debt in more than a century. Inflation has soared and economists are forecasting a deep recession, CNN reported.

Western Sanctions Throw Russia's Economy Into Disarray

Lacking access to about half of its foreign currency reserves - now frozen under sanctions - Russia attempted to pay in rubles, not the dollars stipulated in contracts, on two maturing bonds in early April, credit ratings agency Moody's said Friday. Russia has until May 4 to meet its obligations or it could be considered to be in default, the agency said.

S&P has already called out Russia for a "selective default" on those bonds. US Treasury Secretary Janet Yellen last week skewered governments and companies that have kept their ties to Russia. Western sanctions implemented to punish Russia for what it deems a "special operation" in Ukraine have thrown the economy into disarray, with inflation and economic contraction both likely to be in double digits.

According to the Center for Strategic Research in Moscow, the ranks of Russia's unemployed, which Kyryliuk has now joined, might rise by as much as 2 million by the end of the year. In the worst-case scenario, unemployment might reach 8%, nearly twice February levels, according to the think tank.

According to the Yale School of Management, over 600 enterprises have announced their exit from Russia since the invasion began, while many may pay staff for a few months. Orlova estimates that the departure of Western corporations will result in the loss of nearly one million jobs, citing McDonalds' 60,000 employees, Renault's 45,000, and Ikea's 15,000 employees.

If enacted, Western embargoes on Russian exports might compel mining and oil companies to lay off workers, according to Orlova. An online employment site HeadHunter reveals that the number of persons seeking for work increased by about a tenth in the week ending April 10 compared to the week ending February 24. The number of job vacancies has decreased by about a fourth, as per Reuters via MSN.