By William Jones, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Petrobras has announced that it will release 8,298 employees – or 12.4 percent of its staff – as part of a voluntary redundancy program. The initiative will save at least R$13 billion by 2018, the state-controlled oil firm said in a statement.

Petrobras  headquarters in Rio de Janeiro, Brazil News
Petrobras headquarters in Rio de Janeiro, photo by Doug Gray.

In that release sent to the São Paulo Stock Exchange, 55 percent of these voluntary layoffs will take effect before the end of the year. As part of the program, Petrobras will pay the equivalent of US$2.4 billion in severance packages to employees who enrolled in the plan, which will be recorded in the financial accounts for the first quarter of 2014.

The plan to encourage employees to leave the company was announced in January this year and was open to professional employees over the age of 55. The program aims to meet the goals of optimizing operating costs outlined in the company’s business plan for 2014-2018.

In the initial stages, the program is set to have a negative impact on the company’s income of R$1.6 billion. However, the plan is set to reduce the state-controlled firm’s expenses in the long run, as part of its Productivity Optimization Plan (POP).

This is the first program of its kind to take place in sixteen years and the company is working in other sectors to trim costs as they hope to save R$32 billion from 2013 to 2017. One method the company is using is to issue bonds and shares as the beleaguered firm continues to face decreasing production output and a continuously diminishing share price.

Read more (in Portuguese).

* The Rio Times Daily Updates feature is offered to help keep you up-to-date with important news as it happens.


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