The labor market is slowing down: who is being laid off the most and why wages are losing momentum
21 November 2025 22:52
Large companies are increasingly laying off staff, and salary increases are slowing down. This means that the labor market is entering a cooling phase: businesses are cutting back on human costs and becoming more cautious about expansion, while employees are gradually losing bargaining power, "Komersant Ukrainian" reports, citing Forbes Ukraine analysts.
What was only a worrisome trend in the first half of the year turned into a stable trajectory in the third quarter. These conclusions were reached by media analysts based on the analysis of quarterly reports of about 2,000 of Ukraine’s largest companies with annual revenues of more than UAH 1 billion. The data was collected through financial profiles in YouControl and supplemented with statistics from the Pension Fund.
How salary dynamics were calculated: two lenses – one conclusion
The analysts used two methods to avoid dependence on a single source.
Financial and reporting approach (business lens). We took the quarterly financial statements of about 2,000 large companies, calculated the change in payroll by industry, and adjusted it according to the change in the number of employees. In other words, they estimated how much a business actually pays people per unit of labor.
The Pension Fund’s statistical approach (wide lens). We compared estimates of the average salary in Ukraine, from which insurance contributions are paid and which is taken into account for future pensions. Here, the sample includes the non-market sector.
Both approaches, despite their different bases, showed the same thing: wages are nominally growing, but the dynamics are losing speed.
Wages are rising, but without “turbo mode”
Nominal wages continue to grow, but the rate of growth is slowly but surely falling. Calculations based on YouControl data show a decline in the growth rate of the employment-adjusted payroll: from 22% in the second quarter to 21.8% in the third quarter. The Pension Fund, which calculates the average salary from which insurance premiums are paid, records an even more noticeable slowdown: from 18.4% to 17.4%.
Two things are important here. First, the growth rate is still high. But, secondly, the very direction of the change in the indicator suggests that the post-war inertia of increases is running out. And while businesses in many sectors used to compete for people by raising rates, now the priorities are shifting to stabilization, survival, and cost control.
Processing under pressure: where the salary slowdown is greatest
The sharpest slowdown in salary increases is evident in the manufacturing industry. This is significant because manufacturing has traditionally been one of the mainstays of employment in industrial regions.
In other sectors, analysts have noticed the following financial trends:
- machine building: wage growth fell from 29.7% to 9.1%;
- chemical industry: from 34.8% to 16.9%;
- food industry: from 21.5% to 8.2%;
- light industry: although the number of large companies in the sample is small, employees also experienced a significant slowdown.
This looks like a typical scenario where manufacturing companies face a combination of pressures: export barriers, more expensive logistics, unstable demand, and security risks. In such circumstances, salary increases cease to be a development tool and become something that can be postponed if margins need to be kept at least at a minimum.
Transportation and construction: who is growing against the trend
There are exceptions. In the transportation and logistics industry and construction, the growth rate of wages has accelerated slightly. However, this acceleration is modest and has a specific explanation: it is happening against the backdrop of staff reductions.
Simply put, companies are paying more to those who remain, but there are fewer employees. This can be the result of a shortage of qualified personnel, an increased workload for those who are working, or an attempt to retain key people while downsizing operations.
Staff reductions: more than 20 thousand jobs have gone into the red
The country’s largest companies have already laid off more than 20,000 employees this year, which is almost 2% of the headcount in this group.
The deepest cuts were in the mining industry (minus 7.5%), light industry (minus 7%), and transportation and logistics (minus 3.5%).
Who laid off the most and why
Among the leading companies in terms of staff dismissals are:
- “Ukrzaliznytsia – a drop in traffic and financial pressure forced it to optimize its staff.
- NovaPay (NOVA Group) – a large-scale business reorganization is almost always accompanied by layoffs or redistribution of functions.
- “Pokrovskoye Mine Administration (Metinvest Group) – suspension of operations due to the approaching frontline, i.e., the reason is directly military.
The companies have different motivations, but the result is the same: the business responds to reality by cutting labor costs.
Where employment is still growing
Despite the general wave of layoffs, there are industries that are increasing or at least maintaining the number of employees:
- a small increase in the food industry;
- significant growth in pharmaceutical production;
- significant growth in woodworking.
This is partly logical: pharmaceuticals and food are in stable demand even in a crisis, while woodworking is catching up due to export reorientation and the need for reconstruction.
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Real wages have grown again, but the nuances have not disappeared
One more important touch: in the third quarter, the real average wage moved back into a strong positive territory. After inflation almost “ate up” the growth of real incomes in the second quarter (the range was from -0.1% to 1.4%), the real dynamics in the third quarter was 1.2-2.9%.
The reason for this was a slowdown in inflation to 13% (after 15% in the second quarter). This means that purchasing power is no longer fleeing out of pockets so quickly.
But it should be remembered that real wages still lag far behind nominal wages, not only because of inflation, but also because the military tax has been raised more than three times. Part of the “paper” increase simply turns into a tax.
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