Petrobras Looks to Save Billions in Voluntary Dismissal Plan

  • Brazilian oil producer expects 12,000 employees to sign up
  • Dismissals will cost $1.2 billion, save $9.3 billion

Brazil’s state-controlled oil company is offering employees a voluntary dismissal program as part of an effort to deepen spending cuts to withstand the worst oil market in a generation.

Petrobras expects 12,000 employees to quit under the program at a cost of 4.4 billion reais ($1.2 billion), it said in a statement Friday. The staff reductions will save the company an estimated 33 billion reais through 2020, depending on how many people join the program, it said.

“The goal of the program is to adjust the work force to the needs of the business plan, elevating productivity and generating value for the company,” Petrobras said.

It’s the second cost-reducing measure the Rio de Janeiro-based producer has announced this week as it struggles with low oil prices and a sprawling corruption scandal that has seen former executives imprisoned and suppliers go bankrupt. On Wednesday Petroleo Brasileiro SA, as it is formally known, said it would reduce additional management positions to save 1.8 billion reais a year and strengthen accountability.

Deyvid Bacelar, a union leader and board member representing workers, criticized the move and said staff cuts in operational areas increase the risk of accidents. The last dismissal program was focused on retirement-age workers and 8,300 employees signed up, he said. The current one applies to workers of all ages, which Bacelar said hasn’t happened since the 1990s.

“It’s bad for workers, and especially for those who stay with the company," he said by phone from Bahia.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE