Brazil's Embraer Announces More than 4,000 Layoffs
RIO DE JANEIRO – Brazilian aircraft maker Embraer announced Thursday that it plans to lay off 20 percent of its 21,362 employees in response to the global recession.
The cuts will come in both production and administration, the world's No. 4 airplane manufacturer said in a statement.
Most of the more than 4,000 jobs to be eliminated are at plants in Brazil, though the workforce will also be reduced at the company's subsidiaries in China and Portugal.
Embraer, the market leader in mid-sized passenger jets, attributed the decision to the "unprecedented" crisis in the global economy, noting that 90 percent of its revenues come from exports.
The firm said it planned to mininize job cuts in its engineering division so as to minimize the negative impact on new-product development.
News of the impending layoffs at Embraer followed the release of statistics showing that Brazil's formal economy lost 101,748 jobs last month.
The Labor Ministry pointed out that while jobs losses are always bad, the figure represented a big improvement from December, when 654,946 people entered the ranks of the unemployed.
Brazil has survived the worst of the global financial crisis and Latin America's largest economy could see an upturn as early as the second quarter, the state-funded Institute for Applied Economic Research, or IPEA, said Wednesday.
The circumstances that led to a "Black December" for Brazilian industry could brighten soon thanks to steps already taken by President Luiz Inacio Lula da Silva's government, such as tax cuts and moves to unfreeze domestic credit markets, IPEA said.
The institute's director of Social Research, Marcio Wohlers, told a press conference that last month's boost in auto production and increase in electricity consumption make it possible to envision an economic turnaround in the near future.
Brazil's industrial production was down 12.4 percent in December from the previous month and off 14 percent compared with December 2007, the biggest one-year drop since the government started collecting data.
Regarding credit, IPEA said that after big declines in October and November, the volume of lending in December was roughly the same as in September, before the crisis. EFE