Petrobras sheds 11,704 employees in $1.2-billion dismissal plan

By Peter Millard on 9/2/2016

RIO DE JANEIRO (Bloomberg) -- Brazil’s state-controlled oil company Petrobras plans to save billions of dollars after completing a voluntary dismissal program to help reduce debt and adjust to lower oil prices.

The dismissal plan ended on Aug. 31 with 11,704 employees signing up, Petrobras said in a statement Friday, adding that the numbers may change. It is in line with the company’s original plan to save 33 billion reais ($10.2 billion) through 2020 by shedding 12,000 jobs. The initial severance cost is estimated at 4 billion reais, it said.

Petrobras’s stock price has surged 94% this year after sinking to the lowest since 1999 in January. The company has slashed investments and kept domestic fuel prices stable amid the oil rout to improve cash flow and reduce the largest debt load in the industry. The administration of President Michel Temer has pledged to reduce government interference in the state-run producer and implement policies aimed at reducing costs and increasing competition in the industry.

Petroleo Brasileiro SA, as it is formally known, said it has implemented management training programs to guarantee continuity and safety at operations as it cuts staff.

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