Russian auto giant to lay off 36,000 employees

MOSCOW: Russia's largest car maker, AvtoVAZ, plans to lay off 36,000 employees including 5,000 white-collar staff by December 1, following dipping auto sales and mounting losses.

The company, known for its Lada brand cars, recorded a loss of USD 447 million between January-June 2009 against a net profit of USD 47 million during the same period last year.

AvtoVAZ, based in Togliatti in the Volga region, would lay off one third of the plant's 110,000-strong workforce, sources in the Health and Social Development Ministry said.

The job cuts would be gradual, and those rendered jobless would receive unemployment benefits from the state including early retirement, state-run Vesti FM radio reported.

The car plant is the largest local employer. The leader of "Yedinstvo" (Unity) Trade Union of AvtoVAZ plant Pyotr Zolotaryov has accused the management of violating labour laws saying the staff has not been informed of cuts.

Although topping the sales among other car manufacturers in the domestic market, AvtoVAZ sales have dropped by 45 percent in the first half of the year and had closed main assembly line for a month in August.

AvtoVAZ, set up in late sixties in collaboration with Italy's FIAT has made 25 million Lada cars since 1970. It has production capacity of over 800,000 vehicles annually.