SAO PAULO, Aug 18 (Reuters) - As many as 4,992 employees at state-controlled lender Banco do Brasil SA joined an early retirement incentive plan, helping the nation’s largest lender by assets reduce payroll expenses by 883.5 million reais ($254 million) for this year and next.
The number is in line with Banco do Brasil’s expectations of about 5,000 employees, as a source with direct knowledge of the payroll-reduction plans told Reuters late last month. The reduction is already factored in the bank’s estimates for growth in sales, administrative and general expenses for this year, according to a statement released late on Monday.
State banks are joining a growing group of companies and sectors slashing their payrolls, the latest sign that Brazil is rapidly slipping into recession. In a reversal of years of aggressive hiring, Banco do Brasil and Caixa Econômica Federal are among government banks stepping up voluntary retirement programs for long-serving staff or closing empty positions.
The early retirement programs are expected to trim the combined payroll of Banco do Brasil and Caixa by 8,500 people. State-run Banco do Estado de Rio Grande do Sul SA and Banco do Brasilia SA are following suit.
After years of heavy spending, the government is now asking state banks to implement thriftier management practices. About 101,000 people work at Caixa, while Banco do Brasil had about 112,600 employees as of March.
$1 = 3.4799 Brazilian reais Reporting by Guillermo Parra-Bernal and Aluísio Alves; Editing by Lisa Von Ahn