ERJ Embraer SA

SÃ O PAULO—Brazilian aircraft manufacturer Embraer SA will adopt a voluntary layoff program to cut an undisclosed number of jobs, almost two weeks after it reported a net loss in the second quarter and reduced its revenue estimates this year.

"According to a statement made by supervisors to workers, Embraer wants to save $200 million with the voluntary layoff program," the labor union, which represents workers of Embraer, said in a press release.

A spokesman for Embraer—which has a total of 17,000 employees—confirmed the program, but didn't provide details regarding the target of job reductions nor others details. It attributed the voluntary layoff program to the challenges faced by the aviation industry.

The company reported a net loss of 337.3 million Brazilian reais ($106 million), in the second quarter, reversing a net profit of 399.6 million reais in the year-ago period. The loss took place after the company assumed a provision worth $200 million in the period, amid a corruption investigation.

In 2010, Embraer received a subpoena from the U.S. Securities and Exchange Commission and associated inquiries from the U.S. Justice Department concerning possible noncompliance with the U.S. Foreign Corrupt Practices Act in relation to certain aircraft sales outside of Brazil.

The company created a counsel to conduct an internal investigation of sales in three countries. In May of 2015, Embraer started discussions with the Justice Department for a possible resolution of the allegations.

"In 2016, the negotiations with the U.S. authorities for the settlement of the allegations of noncompliance with the FCPA have significantly progressed, to the point that Embraer recognized a $200 million loss contingency in the quarter ended June 30, 2016, reflecting the likely outcome of this matter," the company said last month.

Then, the company also lowered its estimates for revenues this year, due to the reduction of its view for the delivery of executive jets this year. Embraer now expects that the volume of delivery of its executive jets will reach up to 80 for light jets and up to 45 for large jets at the end of this year, compared with up to 85 and 50, respectively, expected previously.

Embraer forecasts a consolidated revenue for the year reaching up to $6.2 billion, compared with $6.4 billion, expected previously.

Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com

(END) Dow Jones Newswires

August 09, 2016 07:15 ET (11:15 GMT)

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