Moreno orders payroll cuts for public companies; Critics say public payroll is actually rising

Feb 9, 2019

President Lenin Moreno has ordered a 10 percent reduction in payroll for all government-owned companies. The order, intended to reduce the federal deficit, applies to Petroecuador, the petroleum producer, CNT, the national telecommunication company, and Tame Airlines, among the 21 publicly owned companies affected.

Guillermo Lasso

Moreno’s order asks each company to report back by the end of February explaining how they intend to meet the reduction. According to the Coordinating Office of Public Companies, the order affects 39,100 employees.

Moreno’s critics are responding that government efforts to reduce expenses are insufficient. “They say they are reducing the number of government employees but it is not true,” says former presidential candidate Guillermo Lasso. “The number has actually increased since Moreno took office. He attacks [former president Rafael] Correa for leaving the country in debt but he does nothing in fix it.”

Lasso also said that an across-the-board 10 percent employment reduction in public companies is illogical. “If we cut the payroll at Petroecuador and Petroamazonas does this mean we reduce oil production? If not, why are we paying these employees in the first place? I recommend much deeper cuts but they should be determined on a case by case basis.”

Luis Espinosa Goded, economics professor at San Francisco University-Quito agrees with Lasso that public employment has risen under Moreno. “You hear the howls that government employees and services are being cut but this is not the case,” he says. “Far too little is being done to address the core issue of reducing expenses.”

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