The largest automaker in Russia, Avtovaz, is offering workers at its Izhevsk plant a one-time payout of roughly $3,000 to take voluntary redundancy, the company announced on Wednesday. Production has been delayed partially owing to sanctions and a lack of components.
After temporarily halting production in the spring due to a lack of electronic components brought on by sanctions, Avtovaz resumed manufacturing of some of its well-known Lada models at its main factory in Togliatti in June.
The firm was unable to restart production of the Lada Vesta model and sent 3,200 employees from its Izhevsk facility in central Russia on paid leave in March. The company’s longtime shareholder, French automaker Renault, sold its stake to a Russian investor in May.
On Wednesday, it requested that employees at the Izhevsk location, a town with a population of around 645,000 people located about 1,200 kilometers (746 miles) east of Moscow, either find new employment with the company or quit by mutual consent.
Resigning employees will be given a one-time payout of roughly five to seven times their typical monthly compensation, or almost 12 times the state-approved minimum wage. The highest reward would be 183,348 roubles ($3,161) in total.
According to a statement from the company, “Avtovaz emphasizes that the company does not aim to carry out mass layoffs, and the offered supporting measures for the team are totally voluntary for each employee.”
The global shortage of semiconductors and, more recently, the evacuation of foreign manufacturers due to the situation in Ukraine have both been detrimental to the Russian automobile sector, which is heavily dependent on foreign components and machinery.
Due to the fact that many auto assembly factories are situated outside of Moscow in smaller towns, Russian automakers preferred to maintain personnel on paid leave or with less hours and lower compensation as opposed to eliminating positions.