December 7, 2012 / 1:51 AM / in 5 years

Santander Brasil lays off 1000 workers in cost overhaul

* Bank says layoffs necessary to adapt to changing market

* Santander, other banks cut costs as Brazil margins shrink

RIO DE JANEIRO, Dec 6 (Reuters) - Banco Santander Brasil SA on Thursday said it laid off about 1000 employees this week as the bank works to cut costs amid a sluggish Brazilian economy, tighter margins and lower interest rates.

In a news release, the bank said the layoffs were necessary to help prepare the bank for “the new competitive reality of the industry.”

Like other big banks in Brazil, Santander is overhauling its cost structure as it grapples with a sharp drop in interest rates over the past year, a stagnant economy, and record defaults on loans in Latin America’s biggest country.

Santander, which is majority-owned by the Spanish bank of the same name, said the layoffs represent about 2 percent of its total Brazilian workforce of 55,000 employees.

The dismissals have recently led to protests from labor unions and court proceedings in Sao Paulo, where a judge is weighing the legality of the layoffs.

Reporting By Bruno Marfinati; Editing by Eric Meijer

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