At Least 300,000 russian Businesses May Not Survive 2026

defense sector, while civilian industries are left without funding. The consequences are being felt across the country: from machine building to the production of construction materials.

Small and medium-sized businesses are suffering the most. In 2025, nearly half of these enterprises saw a collapse in profits, and the number of SMEs in the trade sector alone fell by 11,500. According to forecasts, another 250,000–300,000 micro-enterprises could close in 2026 amid a rising tax burden.

Already, more than 100 enterprises in st. petersburg and leningrad region have switched to furloughs or a reduced workweek. Starting May 1, 38% of the staff at the “iz-kartex” plant in kolpino, which manufactures mining excavators, will be transferred to a three-day work schedule. In tikhvin, furniture production has halted at the expropriated IKEA plant, which is now part of the “luzales” holding company.

The situation is similar all over the country. In March, “russian railways” (rzd), the magnitogorsk iron and steel works, and the pipe metallurgical company announced layoffs. In 2025, at least ten major companies in the mining, transportation, and machine-building sectors reduced their workforce or shortened the workweek. Among them – the world’s largest titanium producer “vsmpo-avisma”, diamond miner “alrosa”, cement producer “cemros”, “avtovaz, “gaz”, and “kamaz”.

Mass layoffs have so far been avoided thanks to switching to part-time work, but this is a temporary measure. High interest rates and an economic slowdown, exacerbated by the costs of the war against Ukraine, are limiting companies’ ability to recover. The situation will only worsen, leaving companies with no choice but to cut staff.