SAO PAULO, Sept 11 (Reuters) - Workers at the Pindamonhangaba mill of Brazil’s Gerdau SA, Latin America’s largest steelmaker, approved an accord that will result in the layoff of 200 workers for five months as a Brazilian economic recession cuts steel demand.
The local steelworkers union in Pindamonhangaba, a city 125 kilometers northeast of the Sao Paulo, on Thursday said it had approved the deal.
Porto Alegre, Brazil-based Gerdau confirmed on Friday that there will be layoffs but did not give any numbers in its statement.
Brazil’s weak economy, hurt by a giant corruption scandal at state-run oil company Petrobras, has seen tens of thousands lose their jobs since late 2014.
The Gerdau layoffs follow a decision to lay off 70 workers at the mill in May, also for five months. That group of workers is expected to return to work in October when the 200 workers approved for layoffs Thursday will begin their furlough.
A third round of layoffs at Gerdau’s plant could be considered if demand does not pick up, the union said.
One of the hardest hit sectors by Brazil’s worst economic downturn in two decades has been the automobile industry, which is a major consumer of steel and has cut jobs amid the sharp decline in cheap credit and consumer confidence.
About 1,700 workers are employed at Gerdau mill in Pindamonhangaba which produces rolled steel products.
Gerdau said the layoffs were made to preserve jobs in the long term, and that the mill will continue to serve clients despite the layoffs.
Reporting by Priscila Jordão; Writing by Jeb Blount; Editing by Andrew Hay