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(Adds corporate guidance, quote from TAM executive)
SAO PAULO, July 20 (Reuters) - Brazilian airline TAM, the local unit of Latam Airlines Group SA, said on Monday it decided to gradually reduce its domestic operations by 8 to 10 percent due to a challenging economic scenario.
TAM said in a securities filing that the changes will likely result in a 2 percent reduction in its workforce. There will be no layoffs of crew members, it added.
As a result, the company now estimates it will reduce its passenger carrying capacity by 2-4 percent compared with 2014. Previously, it expected stable capacity throughout the year.
"TAM is taking this measure to face a difficult economic context in Brazil," TAM chief executive Claudia Sender said in the statement, citing Brazil's rising inflation rates and weakening currency.
The company said it will continue to fly to all destinations to which it currently offers flights. (Reporting by Walter Brandimarte; Editing by Chizu Nomiyama)