11,700 Petrobras Employees Sign Up To Get Fired

Over 11,700 Petrobras employees signed up to get fired through the Brazilian energy firm’s voluntary dismissal program, according to a new report by Bloomberg.

The government-owned company set up the program to reduce debt and reduce operational costs by $10 billion in the coming years as global oil prices stay low.

Petrobras workers had until August 31st to sign up for the voluntary dismissal program, through which they would be eligible for severance benefits. Paying out the benefits for the 12,000 workers the company plans to let go will cost $1.23 billion, an official statement said Friday.

The firm’s stock prices rick by 4.5 percent Friday morning - the highest jump since August 11th. Petrobras’ stock prices have doubled over the course of 2016 after sinking to a 17-year low in January.

So far, the company has pulled out of major investments and stabilized fuel prices in Brazil in order to keep revenues up as the bear market for oil passes.

President Michel Temer - who replaced Dilma Rousseff after she was officially removed from office earlier this week - has vowed to limit government meddling in the affairs of the national energy company. Instead, Temer has called for liberal policies that lower industry costs and increase competition between rival firms.

Temer has also been named in a major national corruption scandal involving Petrobras’ management and a web of kickbacks and campaign donations.

A major Brazilian oil union has said the mass firings have caused a massive brain drain within the company. Experienced workers are needed to extract resources from the deep waters of the Atlantic Ocean, union leaders argue.

"The company is giving up a work force of 20,000 in only two, three years. You would need more than a decade to restore this kind of knowledge," Jose Maria Rangel, from the oil workers’ federation, told Bloomberg in an interview.

By Zainab Calcuttawala for Oilprice.com

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