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Russia sanctions: Nord Stream 2 fires more than 140 people in Zug

Nord Stream 2 headquarters
The Nord Stream 2 headquarters in Zug © Keystone / Urs Flueeler

Swiss-based company Nord Stream 2, which is in charge of the gas pipeline project between Russia and Germany, has made employees redundant as a result of sanctions following Russia’s invasion of Ukraine.

More than 140 people have lost their jobs at the company, based in the Swiss town of Zug in central Switzerland, according to Economics Minister Guy Parmelin.

“We have learnt that all the staff of Nord Stream 2 […] in Zug, i.e. more than 140 people, have been made redundant,” he told Swiss public radio, RTSExternal link, on Monday evening.

The job cuts were confirmed on Tuesday by the company, which is also reportedly considering filing for insolvency.

A member of the Zug cantonal government told Blick television on Tuesday that Nord Stream 2 was bankrupt and had problems paying its debts. On Wednesday however, she clarified that no official bankruptcy proceedings had been initiated.

The move by Nord Stream 2 is apparently aimed at settling claims ahead of a United States sanction deadline for other entities to stop dealings with it.

The US sanctioned the company last week after Russia recognised two breakaway regions in eastern Ukraine prior to its invasion of the country. The attack has prompted a wave of economic sanctions by the West, including Switzerland.

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This restructuring follows the announcement by German Chancellor Olaf Scholz last week that the pipeline, now complete, would not go into operation after its certification was put on ice due to the war in Ukraine.

When contacted by RTS, the company did not respond.

The 1,200-km pipeline project under the Baltic Sea, designed to double the flow of Russian gas to Germany, was heavily criticised from the start. By bringing gas directly from Russia to Germany, the €10-billion project would have cut Ukraine out of the lucrative gas transit trade and deprived Ukraine of a lever against its hostile larger neighbour.

Critics said the pipeline, which was completed last September, was a political project designed to weaken Ukraine, though supporters, including the German government, said it was a purely commercial venture.

Nord Stream 2 would have run parallel to an existing gas pipeline, Nord Stream 1, which links Vyborg in Russia with Greifswald in northern Germany and has been operational since 2011. 

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