Militarization of russia’s Economy Has Led to the Collapse of a Number of Sectors

Despite the record low unemployment, russia’s labor market is in deep crisis. The militarization of the economy has created a paradox: amidst a shortage of personnel in industry (almost two million vacancies in manufacturing included), massive layoffs are taking place in civilian sectors.
Housing and utilities (-40 % of employees), culture and sports (-9 %), real estate (-8 %), and public administration (-7 %) have been significantly affected. The reasons for this include funding cuts, digitalization, abolition of benefits, and restrictions on migration. At the same time, defense orders stimulate growth in engineering, construction, and manufacturing, but deplete other industries.
Due to sanctions, russia is returning to outdated technologies. The IT sector is laying off up to 20 % of its staff, despite the great need for personnel. After the invasion of Ukraine, the situation worsened: mobilization, emigration, demographic decline, and rising salaries in the military sector have led to a shortage of skilled workers.