Eletrobras prepares a new layoff plan for up to 20% of employees – 03/14/2023 – Market

Eletrobras should launch a new voluntary resignation plan by April to reduce its workforce by up to 20%, which today is around 14,000 people. Currently, the company already has such a program underway, focusing on retirees.

The two plans are part of a process of reorganization of the company’s structure after privatization. The company will concentrate its decision-making process at its headquarters in Rio de Janeiro and reduce the number of companies in which it has a stake.

In a conference call this Tuesday (14) to detail the profit of R$ 3.6 billion recorded by the company in 2022, the company’s president, Wilson Ferreira Junior, said that the new dismissal plan was negotiated with unions and looks at the new company structure.

In the foreground, which is currently underway, the objective was to terminate employees who were already of retirement age. There were 2,494 applicants, with a dismissal cost of BRL 1.2 billion and savings estimated at BRL 95 million per month. The cost was one of the causes of the loss of BRL 479 million in the fourth quarter of 2022.

For the second PDV, he expects a lower termination cost, as salaries for employees of retirement age tend to be higher. According to him, the program will target a framework of reference employees for the company’s new organization.

The company started implementing a new organizational structure that will concentrate decisions at the company’s headquarters in Rio de Janeiro, reducing the autonomy of regional subsidiaries, which were previously the target of political pressure.

The four companies (Chesf, Furnas, Eletronorte and CGT Eletrosul) were incorporated into the holding after the purchase of the few shares that were still in the hands of minority shareholders, operations that cost BRL 286 million.

According to Ferreira Junior, the merger streamlines decision-making and reduces the autonomy of subsidiaries. He stated, however, that the companies will maintain their regional presence, as defined in the energy privatization law.

The new structure also provides for the creation of 13 vice-presidencies, whose nominations will be completed by the end of March. One of them is communication, according to Ferreira Junior, which is important for attracting new customers to the company. In all, the company will have 13 directors.

Ferreira returned to defend the process, which is the target of criticism from President Luiz Inácio Lula da Silva (PT) and his allies. He says that he gave greater agility to the company’s operations, greater flexibility to renegotiate judicial debts and will strengthen it to expand investments.

“The capitalization process created an economic and financial perspective so that Eletrobras can invest focused on a virtuous circle”, he said, saying that the company’s goal is to be “global leadership in value creation with renewable and low-emission infrastructure and solutions”.

In this sense, he said, Eletrobras will participate in the next transmission line auctions planned by the government. “The transmission auction is a priority for the company,” he said, without saying which projects are of interest to the company.

Among the benefits already guaranteed after privatization, said the executive, is the ability to renegotiate debts from the so-called compulsory loan, assumed by the government in the 1960s to expand the electricity sector, today the company’s biggest liability, estimated at R$ 25.8 billion.

In the fourth quarter, the company reversed R$ 1.3 billion of this provision after the renegotiation of part of these debts. At another point, in addition to the PDV, provisions for losses due to bad debt brought down the company’s result.

These provisions are part of a balance sheet cleaning process, one of the focuses of the company’s new management. Ferreira Junior pointed out that the company’s revenue was practically stable, and that the drop in Ebitda, an indicator that measures cash generation, and profit were caused by non-recurring factors.

Without them, he said, the company would have earned BRL 2.5 billion in the fourth quarter of 2022, almost four times the amount seen in the same period of the previous year.

For the result of 2022, the company proposes the distribution of around BRL 913 million, less than the BRL 1.4 billion distributed in 2021, when the company benefited from the increase in energy prices during the water crisis.

The company also decided to allocate resources for the repurchase of up to 10% of the volume of shares it has in circulation. “We are clear about the value that this company is creating”, stated Ferreira Junior.