Russia’s military industry in ruins: mass layoffs, low wages and low morale


Things are not going well for Russia in eastern Ukraine, nor on the Russian mainland, especially in its military-industrial complex. A letter unearthed by the Jerusalem Post reveals that Russia’s military industry is in shambles, with its employees earning low wages and losing civilian contractors because they don’t have the money to pay them.

The Post uncovered a letter sent by the Union of Civilian Personnel of the Armed Forces of the Siberian Region of Russia to Russian Prime Minister Mikhail Mishustin. According to their report, employees complained about their low wages and the massive layoffs the industry had suffered. Although they did not explicitly name the invasion of Ukraine and the sanctions as culprits for these problems, we can hypothesize that this was indeed due to the economic impacts of the various fiscal and economic sanctions that led to these problems.

This is the second time that a Russian union has sent a letter to the Russian government regarding low wages and rising living standards, the first being the Arkhangelsk union. Russian trade unions are a very important political support bloc for President Putin.

This is not the first time that the Russians have experienced mass layoffs in their arms manufacturing sector. SOFREP reported earlier in April that Russian shipbuilder Vostochnaya Verf in Vladivostok had stopped building or repairing ships because it lacked the funds and parts to maintain production and repair services. The lack of foreign components due to economic sanctions severely affected their operations, leading them to halt production altogether. Some of these foreign components would have been navigation systems, naval warfare systems, communication systems, and steering columns, to name a few.

Worse, the company had to cancel government orders for two tankers and two missile boats worth some 35 billion rubles and had to “suspend” all work since April 2022, a large majority of its staff being “licensed”. This is bad news for the Russians as Vostochnaya Verf was the main ship supplier for the Russian Navy’s Maritime Border Forces, according to their official website.

Russian Black Sea flagship Moskva sunk by Ukrainians (Mark J. Grove/Twitter)

Another key piece of evidence to which we can relate this new development is the fact that the main Russian tank manufacturer, Uralvagonzavod, had stopped production in March also due to a lack of components and parts. The company had its assets frozen by the UK government on February 24, after the US government had sanctioned it since 2014 over Russia’s annexation of Crimea. With a large number of Russian tank losses in Ukraine, and many more to come as the Ukrainians were armed with Western anti-tank and anti-armour weapon systems such as the Javelin, NLAWs, Panzerfaust-3s and their own Stug -buggies, Russian forces are unable to replace or repair their tanks – ultimately leaving them in a vulnerable position.

“The Russian military-industrial complex remains dependent on imported high technologies. Without their supply, Russia is unable to continue the production of modern weapons,” the Ukrainian Intelligence Directorate said.

This appears to be true, as a study published by the University of Zilina revealed that the Russian defense industry had become increasingly dependent on importing components during the 1990s, especially on its electronic components. , its avionics, its aircraft engines and its next-generation composites for its military equipment. In fact, 80-85% of the Russian defense industry was considered dependent on foreign components.

From what we understand, a considerable amount of high-tech electronic chipsets used in planes, tanks, missiles and other systems originated in Taiwan.

“In 2011-2012, the dependence of the Russian defense industry on foreign components was estimated at 80-85%. We have already said that the sanctions imposed on the import of military and dual-use goods into Russia in 2014 had a profound impact on the defense industry,” the authors said.

Russia's most advanced tank, the T-90M destroyed in Ukraine (Defense of Ukraine).  Source:
Russia’s most advanced tank, the T-90M destroyed in Ukraine (Defense of Ukraine/Twitter). Source:

Worse still, many of these foreign components were imported from their enemy, Ukraine, which they have been bombing for more than three months.

“The sanctions came into force in 2015-2016 due to the depletion of resources and the expiration of contracts signed with Western countries before the imposition of the sanctions. As a large number of components were imported from Ukraine, it was difficult to find an alternative,” they added.

In response, the Russians tried to produce the components themselves but were only able to replace 57 Ukrainian components out of 1,070 items:

“Defense Minister Sergey Shoygu ordered to master the production of 695 (out of 1070) samples of weapons and equipment that were previously produced in collaboration with Ukrainian enterprises. However, in the first half of 2015, only 57 Ukrainian components were replaced instead of the planned 102 elements. This represented 55% of the annual plan,” the study writes.

Closure of the Russian surface-to-air production plant

In fact, they are so reliant on foreign components that a Russian factory that produced surface-to-air missiles (SAMs) was shut down due to import restrictions imposed by Western sanctions. The facility in question is the Ulyanovsk Mechanical Plant, a plant located in Ulyanovsk Oblast. This installation produced the 9K37 Buk (SA-11 Gadfly) and the 2K22 Tunguska (SA-19 ​​Grison). It is not known if the S-300 and S-400 were made in the factory.

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According to Ukrainian intelligence, almost no component of the installation originated in Russia and almost all components were imported, as a factory worker would have said. When the factory finally closed, these employees said they had only two choices: go on forced leave without pay or join the Russian army to invade Ukraine as SAM operators. If they chose to go to Ukraine, they would be paid around $600.

Ulyanovsk Mechanical Plant in Russia (Yuriy Lapitskiy, CC BY-SA 3.0, via Wikimedia Commons).  Source:
Ulyanovsk Mechanical Plant in Russia (Yuriy Lapitskiy, CC BY-SA 3.0, via Wikimedia Commons)

It would be hard to think that these workers would want to go to Ukraine because they probably know how many casualties their forces have suffered there. Although the Russian public does not publish the number of its victims, the news must have spread like wildfire in Russia about the deaths of their people in Ukraine as families began to demand answers on the place where their sons followed the sinking of the Moskva.

With various military factories closed under Western sanctions, it is only pertinent to ask how long the Russians can sustain their invasion of Ukraine as their losses in tanks, vehicles, missiles and aircraft exceed by far their industrial capacity to replace them. .

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