Petrobras workers are weighing their options after union officials rejected a proposed pay deal, a move that could prompt another strike.
According to Reuters, officials from the Federação Única dos Petroleiros (FUP) union rejected a pay proposal made by Petrobras during an annual meeting.
State-owned Petrobras offered union workers a 4.97 percent salary bump but also proposed cutting overtime pay and regular working shifts, Reuters said.
The state-owned company told Reuters that its proposed plan would also allow administrative workers on a flexible 40-hour week schedule to cut their work week down to 30 hours and take a 25 percent pay cut.
FUP coordinator Jose Maria Rangel told Reuters the offer is “an affront to workers” and promised a “tough response.”
Petrobras told Bloomberg that it will not cut pay or salary benefits and that the plan is meant to preserve jobs as Brazil contends with one of its worst recessions in years.
The FUP, the largest oil workers’ union in Brazil, led a strike action late last year that cut Petrobras production by 2 million barrels per day.
That strike lasted over three weeks and was sparked by a proposed $15 billion asset sale program.
During that strike, Petrobras offered workers a 9.54 percent salary adjustment, far less than the 18 percent salary bump the unions were initially seeking.
The unions also wanted Petrobras to retain local content rules and ensure that it remains the sole operator in Brazil’s offshore sub-salt play.
Petrobras announced plans to cut nearly 12,000 jobs through a voluntary layoff program in March, just two months after slashing its management headcount by 30 percent.
The voluntary layoff program is expected to cost about $1.2 billion and could generate more than $10 billion in savings through 2020, according to the Wall Street Journal.
Petrobras is still dealing with the fall out of a years-long corruption probe into company contracts.
Last week, Brazilian prosecutors charged former Brazilian president Luiz Inacio Lula da Silva with corruption and money laundering for his alleged role as the “boss” of the multi-billion kickback scheme.
Prosecutors have not confirmed if they will seek an arrest order for the 70-year old former president.
Lula da Silva is the most prominent politician to be pulled into the Operation Car Wash probe that has focused on kickbacks and money laundering tied to Petrobras contracts.
The scandal has landed several former Petrobras executives in jail and prompted former Petrobras CEO Maria das Graças Silva Foster to resign last year.
The kickback probe forced Petrobras to take a $2.05 billion write down for “improperly capitalized additional spending” in its 2014 annual results along with a $7.15 billion loss for 2014 primarily related to a $14.76 billion impairment charge.