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State-owned companies must lay off more than 25.000 employees

Written by Paulo Nogueira
Published 17/05/2019 às 07:46

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state layoffs government employment economy

Once symbols of stability and a good guaranteed retirement, large government state-owned companies such as Correios, Petrobras, Infraero, Serpro and Embrapa will need to lay off workers to save billions and reduce cash deficit

RIO DE JANEIRO, BRAZIL – Amidst guidance from the federal government to reduce costs and generate results, state-owned companies are expected to further reduce the number of employees in 2019. A survey conducted by G1, based on information from the Ministry of Economy and companies , indicates that the number of layoffs in the year may exceed 25.000.

According to Fernando Soares, secretary of Coordination and Governance of State Companies (Sest) of the Ministry of Economy, seven voluntary resignation programs (PDVs) or incentives to retire from different companies have already been approved by the government this year.

The government estimates a total of 21.500 layoffs over the year from these seven programs alone, which could generate payroll savings of approximately BRL 2,3 billion per year.

This number does not include the PDVs announced in April by Petrobras, that by law do not require government approval for the release of termination programs. Also considering the expected 4.300 layoffs at the oil company, the expected total of layoffs in the year at state-owned companies reaches 25.800.

Among the state-owned companies that have already announced PDVs or encouraged retirement programs are Correios, Petrobras, Infraero, Serpro and Embrapa.

The plans are primarily aimed at older workers who are approaching retirement age or who are already retired by the INSS.

The reduction in the staff of state-owned companies has been taking place continuously since 2015, in a process initiated during the Dilma Rousseff government.

According to the secretariat, since 2015, the number of cuts resulting from the implementation of voluntary dismissal programs has reached approximately 44.000.

Last year alone, there was a reduction of 13.434 people in state-owned companies that use this system. According to official data, the main reductions were at Caixa Econômica Federal (2.728), Correios (2.648) and Banco do Brasil (2.195).

While the market welcomes state-owned companies, they have been criticized by unions and workers' federations.

The National Federation of Postal and Telegraph Workers (Fentect) classifies the termination program at the Post Office as “part of the state scrapping project for outsourcing and privatization”.

Currently, there are 134 federal state companies, of which 88 are subsidiaries of Petrobras, Eletrobrás, Banco do Brasil, Caixa, Correios and BNDES. In 2016, there were 154.

In the last two years, 20 state-owned companies have been privatized or liquidated, most of them subsidiaries of Eletrobrás and Petrobras.

President Bolsonaro's government has committed to significantly reducing the number of state-owned companies and is advocating the sale of several of them, as well as their subsidiaries.

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Paulo Nogueira

With a technical background, I worked in the offshore oil and gas market for a few years. Today, my team and I are dedicated to bringing information from the Brazilian energy sector and the world, always with credible and up-to-date sources.

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