Brazilian postal service must cut costs or face privatization, minister says

The Brazilian postal service, controlled by the state-owned corporation Empresa Brasileira de Correios e Telégrafos (ECT) or simply Correios, will have to make “extreme” spending cuts to avoid privatization, said Gilberto Kassab, Minister of Science, Technology, Innovation and Communications. The state-owned mail organization had losses of $670.8 million in 2015 and $638.9 million in 2016. The minister says the government is not going to bail out the company because “it can't afford” to do so.

Last December, its CEO Guilherme Campos had announced a voluntary redundancy package to ease the burden on the company's coffers.

Kassab says he is opposed to privatizing the service and will make every effort to avoid that. “But we've reached a dead-end. Unless we cut spending and expand our range of services to increase revenue, we'll be headed for a full or partial privatization,” he said.

Translated by Mayra Borges