Petrobras' Austerity Leads to Strike by Brazilian Oil Workers

Core Viewpoint - Petrobras is facing a two-day warning strike due to stalled negotiations over variable compensation and cost-cutting measures, reflecting growing tensions between the company and its workforce [1][5][6]. Group 1: Company Strategy and Financials - Petrobras is implementing austerity measures in response to declining Brent crude oil prices, which are currently near $65 per barrel, necessitating tighter financial controls and cost reductions [2][3]. - The company has revised its five-year strategic plan to prioritize cost-cutting over its previous expansionary strategy, although the capital expenditure for 2025 remains unchanged [4]. - Petrobras aims to explore all avenues for cost reduction while focusing on simpler projects with quicker cash returns [4]. Group 2: Labor Relations and Union Response - The variable compensation plan has become a key point of contention for the oil workers' union, which argues that the company's cost-cutting approach undermines employee morale [5]. - The union, representing a significant portion of Petrobras' workforce, claims that management has shown little progress in negotiations, leading to the decision to strike [6]. - Petrobras has acknowledged the union's announcement but has not received an official notification of the strike and has not commented further on negotiations or austerity measures [7].