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Business

Brazil's Petrobras and Odebrecht to Reduce Costs

Two Brazilian companies ensnared in massive corruption investigation said Friday they plan to cut billions of dollars in costs or sell off assets

The headquarters of Odebrecht SA is pictured in Sao Paulo, photo: Reuters/Paulo Whitaker
2 years ago

SAO PAULO — Two Brazilian companies ensnared in massive corruption investigation said Friday they plan to cut billions of dollars in costs or sell off assets.

State-run oil company Petrobras said in a statement that it has approved a voluntary layoff program to reduce its workforce by about 12,000 and save 33 billion reals (about $9.20 billion) by 2020.

Executives of Odebrecht SA, are escorted by federal police officers during their transfer to Curitiba city as they leave the Federal Police headquarter in Sao Paulo, Brazil, March 22, 2016. Photo: Reuters/Paulo Whitaker

Executives of Odebrecht SA, are escorted by federal police officers during their transfer to Curitiba city as they leave the Federal Police headquarter in Sao Paulo, Brazil, March 22, 2016. Photo: Reuters/Paulo Whitaker

Petrobras has been at the center of the sprawling corruption scandal that has ensnared some of Brazil’s most powerful lawmakers and business executives. Last month, the embattled company said it lost $10.2 billion, in the fourth quarter. That brought its full-year 2015 result to a $9.6 billion loss.

Meanwhile, in an interview published Friday by the Folha de S. Paulo newspaper, the head of the Odebrecht construction company said it has put assets up for sale to raise R$12 billion (US$ 3.3 billion).

Newton de Souza told the newspaper the company plans to sell a hydroelectric power plant and a road concession in Peru and a stake in a petroleum block in Angola.

Souza became president in 2015 after former chief executive Marcelo Odebrecht was arrested. In early March he was sentenced to 19 years in prison on charges of corruption and money laundering.

Odebrecht is the highest profile executive to be convicted in the so-called “Operation Car Wash” investigations and one of the central private sector figures in what prosecutors have called a criminal organization.

Prosecutors have said the overall scheme involved more than $2 billion in bribes paid to obtain Petrobras contracts, with some money making its way to political parties, including the governing Workers’ Party.

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