EconomyFinancialMore hiring and retirement payments raise Pemex's labor liabilities...

More hiring and retirement payments raise Pemex's labor liabilities by 29%

The labor liability of the state-owned Pemex has had a new rise. This component of the debt, which can be understood as the debt generated by the company for the hiring and permanence of an employee, added up to one trillion 384,000 million pesos at the end of the quarter.

The new figure implies an increase in relation to the end of 2021, when the company managed to reduce this item by 10% compared to a previous year.

Pemex’s debt to its employees has become a structural problem that has received little attention during the six-year term. The state company drags this liability derived from the large number of employees it has, the aging of its workforce and a collective contract that represents large costs. “The labor liability figures are a consequence of the hiring of more personnel and the gradual increase in retirement and retirement benefits,” says Víctor Gómez Ayala, an analyst and academic at the Autonomous Technological Institute of Mexico (ITAM).

To gauge the importance of labor liabilities, it represents about a third of the company’s short- and long-term debt , which closed the last quarter at 4.1 billion pesos.

Already in previous years, before the start of the current six-year term, labor liabilities had been reduced significantly, after the oil company reached an agreement with its union to reduce the retirement age of its employees with less than 15 years of service, the entry of a mechanism for new workers to fund their pensions through individual accounts and some transfers from the Ministry of Finance.

In 2018, the last quarter of the last administration, labor liabilities closed at one trillion 80,000 million pesos, after a progressive reduction after the approval of the 2013 reform. But the increase began again in 2019, in just one year Pemex added 376,000 million labor liabilities, equivalent to 35%, the highest jump to date.

In total, so far this administration has increased by 29% and its peak was reached in 2020, when the figure was one trillion 535,000 million pesos.

The increase comes amid claims from the main union of the oil company , which alleges non-compliance with its collective contract. The state, especially the high-level ones, but this has not been enough.

The federal administration has made debt reduction one of its main objectives. The company’s total liabilities were slightly reduced, by 3%, at the end of the first quarter and closed at 108,000 million dollars, but the reduction of labor liabilities is still one of the great pending issues of the administration that has put in the center of energy policy to company personnel.

Some state oil companies, such as Colombia’s Ecopetrol and Brazil’s Petrobras , have reduced their workforce to clean up their finances. “The business hasn’t held up well in terms of efficiency, it’s a ‘bloated’ company (in terms of staff), which is 100% government owned and not run like a private, cost-efficient company,” says Aaron Gifford , emerging markets analyst at HSBC bank.

The second company has minimized its number of collaborators and from 2013 – when it was the most indebted oil company in the world – to date it has reduced this figure by 40,000 employees, around 50% of the total it had before, according to figures from Statista consultancy.

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