Russia’s Alrosa, the world’s largest producer of rough diamonds by volume, is considering suspending some production in 2025 and reducing its workforce as it confronts plummeting global diamond prices.
The company’s CEO, Pavel Marinychev, highlighted these challenges during an interview on Thursday, citing ongoing Western sanctions and a downturn in the diamond industry.
Marinychev described the global diamond market as being in a “deep crisis,” with prices declining for the second consecutive year.
For Alrosa, the situation is further complicated by a ban on Russian diamond sales to G7 and EU countries, a consequence of sanctions imposed by Western nations.
“Certain areas that are less profitable, on the borderline of profitability, may face suspension during this crisis period,” Marinychev said in an interview with a local television station in Yakutia, a region in Russia’s Far East where most of Alrosa’s production occurs. He noted that operations in these areas could be restarted swiftly if market conditions improve.
“We are currently navigating a difficult period. Our focus is on resilience and enduring until prices rebound,” he added.
The Russian government occasionally steps in to purchase diamonds from Alrosa through a state fund, providing some relief.
To manage costs, Alrosa plans to reduce its labor expenses by 10% in the coming year, a strategy that will involve staff reductions.
While the company employs around 35,000 people, Marinychev did not specify how many positions would be affected.
The measures reflect Alrosa’s efforts to weather the dual challenges of declining demand and geopolitical restrictions while remaining prepared for a potential market recovery.
