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Putin Warns Businesses On Excessive Job Cuts

Russian Prime Minister Vladimir Putin

Russian Prime Minister Vladimir Putin

MOSCOW (Reuters) -- Russian Prime Minister Vladimir Putin has told employers not to cut jobs unnecessarily as unemployment soars due to the economic downturn.

"Business should people without extreme need," state news agency RIA Novosti quoted Putin as telling a meeting with ministers.

"Our goal is to minimize losses [of business], maintain its ability to survive, but not to guarantee its profits," he added.

Putin, who served as president from 2000 to 2008 before becoming prime minister, still enjoys huge popularity -- unlike his predecessor Boris Yeltsin, who led Russia through the rocky 1990s when unemployment rates and wage arrears were high.

But economic stability, and Putin's popularity, could be damaged should unemployment rates rise sharply from the current 5 million, or 6.6 percent of the workforce.

Russia's economy is facing a sharp contraction because of a collapse of oil prices and capital outflows.

Industrial output shrank 10.8 percent on the month in November and wage arrears doubled, prompting industries from steel makers to construction firms to lay off thousands of people.

Around 400,000 Russians lost their jobs in November in yet another sign the economy is plunging toward a recession expected to last until at least mid-2009.

Deputy Prime Minister Aleksandr Zhukov told Putin 70,000 more Russians had been fired in the week of Dec 10-16, and some 207,000 had been told to work part time or sent on holiday.

He said the worst hit sectors were machine building, steel and chemical industries, construction, and cargo transportation.

"If we talk about regions which require special attention, they are Vologda, Chelyabinsk, Sverdlovsk, Nizhny Novgorod, and Yaroslavl regions," RIA quoted Zhukov as saying.