Brazil’s Eletrobras offers buyout to cut over 2,300 jobs, a fifth of workforce

Brazil’s electricity company Eletrobras (ELET6.SA) offered on Friday a voluntary buyout to well over 2,000 people representing roughly 22% of its workforce, in a first major cost cutting move following its privatization.

Centrais Eletricas Brasileiras SA, as the company is formally known, said the voluntary layoff program will apply to 2,312 employees and will cost up to 1 billion reais ($189 million). At the end of June, the firm had 10,508 workers.

Electrobras said the offer included cash payments equivalent to three years’ healthcare, a year of food aid, and nine months’ salary, as well as a compensation companies must pay out in cases of unjustified dismissal.

The move is part of a major overhaul after the Brazilian government privatized its largest utility through a 33.68 billion-real ($6.54 billion) offering, and brought back its former chief executive Wilson Ferreira Junior to the company’s helm..

In a securities filing, Eletrobras said the program is a measure to streamline its costs and expenses and it expects to recoup the money it spends in around 11 months.

($1 = 5.2949 reais)