Sanctions and war are killing the Russian economy: the largest shipbuilding plant has begun massive layoffs

Staff reductions have begun at the largest shipbuilding plant in the Russian Federation, Vympel, which produces civilian and military vessels.

This was reported by the Center for Countering Disinformation.

The reason for the reduction is the lack of funding due to the depletion of the national welfare fund and budgetary problems in the Russian Federation.

“The day before, the Russian government reduced funding for the fleet modernization program by 40%. In addition, due to a sharp restriction on government orders in the industry, production has significantly decreased,” the CPD noted.

In addition, the huge costs of the war against Ukraine have led to a record budget deficit and cuts to all spending not directly related to the military-industrial complex. Together with sanctions, financial problems, and falling revenues, this has led to a sharp decline in production in many sectors of the Russian economy.

“Ru-propaganda is powerless to hide the devastating consequences of the Kremlin’s reluctance to end the war. However, the Russian authorities seek to continue fighting even at the cost of destroying their own economy,” the CPD noted.

It was previously reported that business activity in Russia’s industrial sector fell in July 2025 to its lowest level since March 2022 .

As reported, up to 20% of car dealerships in Russia may close by the end of the year.

In addition, Russia’s largest automaker AvtoVAZ has suspended production from July 29 to August 11 inclusive . The official reason is “corporate vacation,” but in reality the decision is related to a critical situation on the market: the company’s warehouses are overflowing with unsold cars.