Brazilian flag carrier Varig, which was recently sold to VarigLog, a former subsidiary, announced Friday that it will lay off 5,500 workers as part of a broad restructuring plan.
According to a press release issued by the airline, in making the move the company is adapting to "real current operational needs". The release adds the company will "retain 3,985 employees out of a total of 9,485 in Brazil".
í‰lnio Borges, president of Brazilian National Union of Aircraft Workers (Sindicato Nacional dos Aeronautas) has informed that Varig’s workers intend to appeal to the courts to have their rights protected.
Borges classified as "absurd" Varig’s action to fire so many people (5,500) at once.
"From our point of view this is even an act of cruelty because Varig’s workers for years have been putting lots of effort to keep the company flying amid all its difficulties. In the latest months they didn’t even have a salary and they had to face the legitimate wrath of the public who was getting bad service," the union leader said, adding:
"Now that the company is practically given way to a super rich new owner, sustained by a huge foreign investment fund, instead of paying the late salaries, they decide to drastically reduce the number of workers."
Borges called the action by Varig an "spoliation of workers right" and assured that his union and the workers are not going to take it passively.
According to him, the new Varig is sending former workers home without paying them a cent, although the company hands them a guide explaining how they can receive unemployment insurance and their FGTS (Fundo de Garantia por Tempo de Serviço – Guaranteed Severance Fund), a Social-Security -like benefit.
Varig admitted there’s "a commitment to gradually re-hire redundant staff depending on the pace in which the airline’s fleet is restored and the consequent expansion of the national and international routes."
The company said it will maintain its current operations, which are for the moment limited to flights among the Brazilian cities of São Paulo, Rio de Janeiro, Porto Alegre, Fortaleza, Salvador, Recife and Manaus.
Varig also runs daily flights to Frankfurt, Germany, and Buenos Aires and on alternate days to Miami and New York.
The company estimates that the layoffs will cost an estimated US$ 116 million. Varig must also meet another US$ 50 million payment in arrears through July, according to the Brazilian press.
Varig, which until three months ago ran 70% of all international flights originating in Brazil, currently operates with just 10 aircraft.
Saddled with debts of some 3 billion US dollars, the air carrier was acquired at public auction last Thursday by VarigLog, the company’s former cargo subsidiary, for US$ 24 million.