Avtovaz Plans to Cut 1,100 Workers in Russia

By Olga Razumovskaya and Jason Chow

Avtovaz (AVAZ.MZ), Russia's largest auto manufacturer, plans to cut 1,100 people from its workforce in a bid to steer the company back to profitability during a slowdown in the country's economy, said a spokesman.

Avtovaz, which is controlled by French car maker Renault SA (RNO.FR) and Japan's Nissan Motor Co., is struggling as falling oil prices, a sharp downturn in the Russian ruble and economic sanctions have hit Russia's economy, sending demand spiralling down.

In an internal document reviewed by the Wall Street Journal, Avtovaz Chief Executive Bo Andersson and the head of the company's union said that "in light of a tough economic situation," the company will have to endure another round of layoffs.

Last year, Avtovaz, which makes Lada cars, slashed its workforce by 12,000 workers to its current level of around 50,000. After the 2014 cuts, the company said it wouldn't lay off any more assembly line workers and would focus on white-collar staff from the management, engineering and administrative ranks.

Write to Olga Razumovskaya at [e-mail] and Jason Chow at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires