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Head of Russian Railways, longtime Putin ally set for exit

Vladimir Yakunin appears set to leave his post as head of Russian Railways, the country's largest employer, for a position with less influence.

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Vladimir Yakunin, chief executive of Russian Railways, walks near a train during a visit to the city of Omsk August 5, 2012. Yakunin, the head of the Russian Railways state monopoly and an old friend of President Vladimir Putin, will leave his post to become a government senator, a company spokesman told Reuters on Monday.

Dmitry Astakhov/RIA Novosti/Reuters/File

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One of Russian President Vladimir Putin's oldest political allies appears set to leave his post as head of Russian Railways, the country's largest employer, for a position with less influence.

Vladimir Yakunin has headed the railway monopoly for a decade, but was announced Monday as a candidate for senator in Russia's upper house of parliament, which would appear to mean a substantial loss of power.

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The move is a surprise, given that the 67-year-old reportedly received a three-year contract extension last year.

In a farewell message to Russian Railways staff published Tuesday by Russian agency Tass, Yakunin said "the country's leadership" would decide his future.

In televised comments Tuesday, Putin said he would meet Yakunin to discuss his possible departure. "It's his decision," Putin said. "I'll discuss that with him."

Any move to Russia's upper house, called the Federation Council, is likely to be a formality, since senators are nominated by regional authorities rather than directly elected.

In Yakunin's tenure at Russian Railways, he has overseen wide-ranging changes, including the introduction of high-speed rail on selected routes, but the company has been forced to make major cost cuts during the economic downturn. In February, the company said it had cut 40,000 jobs from what had been a workforce of 880,000.

In the spring, a dispute between Russian Railways and regional governments resulted in many services being canceled. The dispute led Putin to publicly criticize his government on TV, asking if officials had "gone mad."

Yakunin has been an associate of Putin since their time together in Putin's native St. Petersburg in the mid-1990s, when both were part of the same elite housing community. He was placed under U.S. sanctions in March 2014 as part of a group of 20 senior officials and businessmen seen as close to Putin.