Energy giant Gazprom is planning to cut staff at its headquarters in St. Petersburg, a company spokesman said, as the Russian state-controlled company struggles to gain traction in Europe, Reuters reports.

Russian news agency Tass, citing media outlet 47news, said Gazprom chief Alexei Miller had been told in a letter that there were plans to cut the headcount at its headquarters by about 40%, to 2,500 employees, from 4,100 currently, according to Agerpres.

A Gazprom spokesman confirmed the news when contacted by Reuters.

Gazprom currently employs 498,000 people. In 2023, the Russian giant posted a net loss of nearly $7 billion, its first annual loss since 1999, as it lost the lucrative European market after the start of Russia’s invasion of Ukraine.

Gazprom’s sales in Europe have fallen further since January 1, 2025, when Ukraine ended the transit of Russian natural gas through its territory. Combined with the closure of previous routes, Kiev’s decision not to renew the transit agreement marked the end of decades of Russian dominance of Europe’s energy markets.