SAO PAULO (Reuters) – Brazilian power company Eletrobras on Friday gave more than 2 000 representatives roughly 22% of employees, the first major cost-cutting move since going private.
Centrais Eletricas Brasileiras SA, as the company’s official name is, said the voluntary redundancy plan would apply to 2,189 employees and would cost up to 10 billion reais ($189 million dollars). At the end of June, the company has 10, 508 workers.
Electrobras said the proposal includes cash payments equal to three years of health care, one year of food assistance and nine months of wages, as well as compensation the company must pay in the event of wrongful dismissal.
The move is part of a major overhaul by the Brazilian government following the privatization of its largest utility by 54. 33 billion reais ( 6.54 billion US dollars) and put its former CEO Officer Wilson Ferreira Junior brings back the company at the helm..
Eletrobras said in a securities filing that the program is a measure to streamline costs and expenses , is expected to recover the funds it spent around 11 months.