The Russian car plant of the Japanese automobile concern Toyota (TYO:7203) (OOO Toyota Motor, St. Petersburg) has started laying off employees.

The press service of the St. Petersburg Labor and Employment Committee told Interfax that 1.937 thousand employees are currently idle at the company. At the same time, according to the company’s estimates, the total number of employees of Toyota Motor LLC as of September this year amounted to 2.35 thousand people.

“Dismissals by agreement of the parties began on November 14. Toyota made a personalized offer to each employee, which includes payment from 12 average salaries, retention for a year after dismissal of VHI, reimbursement of expenses for training, retraining, professional development in the amount of up to 50 thousand rubles,” – reported in the Committee.

Earlier it was reported that OOO “Toyota Motor” will begin to reduce the staff of the St. Petersburg plant in November-December. The head of St. Petersburg’s labor and employment committee Dmitry Cherneiko said that the bulk of employees will be dismissed by agreement of the parties, not by the redundancy procedure.

The Ministry of Industry and Trade of the Russian Federation announced in late September that Toyota Motor LLC would completely stop production of cars at its plant in St. Petersburg. The automaker pledged to retain after-sales service of Toyota and Lexus cars, as well as support of the dealer network.

In its Q2 financial statements, Toyota estimated the costs associated with the cessation of production in Russia at 97 billion yen (more than $650 million at current exchange rates). Masahiro Yamamoto, Chief Accountant of the concern, specified during the press briefing that the corresponding “amount of losses incurred in the first half of the year includes expenses for dismissal of departing employees and expenses due to impairment of assets”.

Toyota’s Russian representative office (OOO Toyota Motor) was registered in 2001. The company’s branch is the Toyota plant in St. Petersburg with a capacity of 100 thousand cars per year. The plant was put into operation at the end of 2007, producing RAV4 and Camry models within the framework of the SPIK concluded with the Ministry of Industry and Trade of the Russian Federation. The total amount of investments by Toyota under the contract was stated at the level of 20 billion rubles.

According to the Association of European Businesses (AEB), Toyota’s sales in Russia in January-October 2022 fell by 78.2% to 21,205 thousand units. The market share of the group decreased by 3.4 p.p. – To 4.2%.