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. Last Updated: 07/27/2016

Firms Plan To Lay Off 200,000

Russian companies plan to slash up to 200,000 jobs in the next two months because of the economic slowdown, Alexei Vovchenko, deputy head of the Federal Labor and Employment Service, said Wednesday, Interfax reported.

Data showed last week that the country's unemployment count rose to a seven-month high of 4.6 million people, or 6.1 percent of the workforce, in October. Wage arrears rose to 4 billion rubles ($146 million) in October, their highest level in a year.

The estimates are based on data from employers who are obligated to notify the agency two months before individual sackings and three months before major job cuts, Vovchenko said, adding that besides the official numbers there would also be a huge block of off-the-record layoffs.

The crisis in 1998 did not lead to a major rise in the jobless rate because employers chose to maintain an official headcount while delaying salary payments. Analysts have said that this time the situation will be different.

The Economic Development Ministry expects unemployment to rise in the financial, construction, retail-trade and mineral-extraction sectors. The public sector, which employs one-third of the workforce, will not be affected yet.

Vovchenko warned that some small and medium-sized enterprises may force their workers to sign resignation letters and promised to set up consultation centers across the country to advise workers on their rights.