(Reuters) - Russia's largest telecoms operator MTS said on Friday it would cut around 2% of staff and abandon high-cost mergers and acquisitions as it seeks to reduce its debt burden while interest
MTS to Reduce Workforce to Manage Debt Amid High Rates
(Reuters) - Russia's largest telecoms operator MTS said on Friday it would cut around 2% of staff and abandon high-cost mergers and acquisitions as it seeks to reduce its debt burden while interest rates are at their highest in over 20 years.
Analysts polled by Reuters expect the central bank to hike its key rate by 200 basis points to 23% on Friday as it tries to keep a lid on inflation that President Vladimir Putin named as a worrying problem in an overheating economy.
Several Russian companies and lobby groups have complained about prohibitively high interest rates. The central bank, which blames stalling investment on widespread labour shortages, has borne the brunt of the criticism.
"The key task of MTS in the tight monetary policy environment will be to reduce the debt burden next year," MTS said in an update on the transformation of its corporate structure. "In 2025, we will abandon high-cost M&A."
The company said it would invest less, reduce its high-risk investments and stop developing certain low-growth and low-profit business lines.
"We are not planning massive staff reductions and expect that optimisation will affect less than 2% of the group's employees," it said.
MTS said that Inessa Galaktionova had been appointed CEO, replacing Vyacheslav Nikolaev, who is moving to become chairman of the board.
(Reporting by Alexander Marrow and Gleb Stolyarov; Editing by Mark Trevelyan)
