Brazil’s five major state-owned companies have cut 25% of staff in six years – ministry

RIO DE JANEIRO, BRAZIL -The country’s five major state-owned companies – Banco do Brasil, Correios, Caixa, Petrobras, and Eletrobras – lost more than 111,000 employees between the beginning of 2015 and March this year. Together, they cut just over a quarter of their staff during that period, retrenching to a total of 327,397, according to the Economy Ministry’s Panorama of State-Owned Enterprises.

The largest declines were at Eletrobras (-45.8%) – which is about to be handed over to the private sector – and Petrobras (-42%).

This contraction is driven by a combination of factors, ranging from the focus on downsizing the state under the Michel Temer administration, to the current economic crisis, which is affecting companies’ ability to invest and leading the government to resort to selling state-owned companies to balance public budgets.

This also includes the digitalization of services and operations, especially in the financial sector.

“This is a course correction, after a period of growth in the (state) sector under previous governments. It was as if the pendulum swung a bit to the side of state expansion, where it was. In the case of Eletrobras, privatization weighs, but the scenario is no different for Petrobras,” says Sérgio Lazarini, professor at Insper.

Marco Tulio Zanini, professor at FGV EBAPE, stresses that the economic crisis has contributed to this downsizing process:

^There is the context of recession. Without demand, these state-owned companies lose the prospect of future productivity and are left with an idle or underutilized workforce. There is no incentive to keep these companies operating at their maximum productivity levels.”

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error