February 25, 2024

A major Brazilian financial institution pledges to cut costs and may soon lay off its staff

In order to reduce costs, the layoffs in the enterprise should reach 18% of the staff, reaching 1,200 employees. paying off.

at recent days , XP It released its results for the fourth quarter and delivered a much lower-than-expected result, with lower revenue and disappointing net income.

This brings the profit for the period to R$ 783 million, which is a decrease of 21% compared to the previous year. Analysts expected a value of R$1 billion.

In addition, revenue was R$ 3.2 billion – 12% lower than market expectations. However, in 2022 XP managed to increase revenue by 10% to reach R$14 billion.

interest guilt

In view of this, among the reasons for the not very good performance of XP, according to Bruno Constantino – CFO of the company – is the accelerated rise in interest rates, which softens the situation.

He explained: “With all this difficult scenario and with interest rates rising from 2% to 13.75% in a year and a half, we are still able to increase revenues and maintain stable profits.”

Discounts in the company

XP expects the company’s earnings to grow again this year. For this purpose, the company intends to reduce, in addition to the cost reductions it has already implemented this year, SG&A (administrative sales and general expenses, in translation), between R$5 billion and R$5.5 billion this year, compared to R$5.6 billion in 2022.

According to Bruno Constantino, XP is “adjusting overruns made by growing too fast,” which includes cutting back on leadership in certain areas of the company.

In 2022, the company finished the year with 6,928 employees. However, in January of this year, this number has already reached 6549 – a decrease of 5.5%. “Our business has very high operating leverage. It will go up even more with these cost reductions,” Bruno said.

the chapter

According to a recent report by BTG Pactual, XP’s layoffs should reach 18% of the staff, to reach 1,200 employees. Thus, according to the analysis conducted by BTG, staff cuts will bring relief to XP’s operation.

With information from Brazil Journal.

Photo: Tsyhun/Shutterstock