March 27, 2017 / 1:15 PM / 6 months ago

Brazilian post office looking to fire up to 25,000 workers -paper

SAO PAULO, March 27 (Reuters) - Empresa Brasileira de Correios e Telégrafos (ECT), Brazil’s state-run postal service, is considering laying off as many as 25,000 workers to stem growing financial losses, newspaper Valor Econômico reported on Monday.

The move could set a precedent for other state-controlled enterprises, which are forbidden by Brazilian law from firing workers without “just cause” or lengthy disciplinary procedures. ECT lawyers are analyzing if the company could sidestep that obligation given its severe financial situation, according to the report.

Valor said ECT Chief Executive Guilherme Campos confirmed the discussions but declined to say how many workers could be targeted. Preliminary estimates indicate ECT would need to fire between 20,000 and 25,000 workers to balance operating expenses, the paper said without saying how it obtained that information.

Press representatives for ECT were not immediately available to comment on the report.

Campos told Reuters in January that the postal service planned to sell some assets this year after posting a loss of 2 billion reais ($641 million) in 2016.

For decades, the Brazilian government has nominated politicians to senior ECT roles as a bargaining chip, exerting additional pressure on its swelling payroll while demand for physical postage was falling rapidly.

In January, ECT offered a voluntary buyout program to 14,000 of its 117,500 employees, aimed at saving up to 1 billion reais. According to Valor, only 5,500 workers joined the program, disappointing management expectations of around 8,000 cuts.

$1 = 3.12 reais Reporting by Bruno Federowski; Editing by Andrea Ricci

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