Submitted by Zainab Calcuttawala via OilPrice.com,
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.
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.
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Of course this is all great news – according to 'the markets'…
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.
But, as we noted previously, what is most fascinating, however, is that despite the all too clear economic depression raging in Brazil, which gets progressively worse by the month, the stock market continues to rise pricing in a Phoenix-like recovery, which even Goldman now admits will take "4-5 years, or perhaps longer." Why this unprecedented surge in asset prices? Simple: a mountain of central bank-created liquidity which finds its way into any market that offers even a modium of incremental yield, such as Brazil's. Alas, for those asking when the record divergence shown below closes, and the Bovespa will be painfully reacquainted with gravity, we have no answer.
via http://ift.tt/2cq1tvt Tyler Durden