(Updates with closing prices in second paragraph.)
Oct. 10 (Bloomberg) -- Redecard SA, Brazil’s second-largest card-payment processor by market value, rose to a 16-month high after it cut staff to make operations more efficient.
Redecard gained 5.4 percent to 28.65 reais at the close of Sao Paulo trading, the highest since June 17, 2010. Rival Cielo SA rose 3.2 percent to 44.50 reais. The benchmark Bovespa index advanced 4 percent.
The company dismissed about 300 employees between July and September, mostly in the so-called back office and customer service departments, Valor Economico reported, citing an unidentified person familiar with Redecard’s plans. An official at Redecard’s press office who asked not to be identified in accordance with company policy confirmed there had been job reductions to improve efficiency. The official would not say how many cuts were made.
“The restructuring process will have a negative impact in the next quarters but will improve Redecard’s margins in the future,” Pedro Galdi, head strategist at SLW Corretora brokerage, said in a telephone interview from Sao Paulo. “Besides that, the outlook for credit-card usage in Brazil is promising, which benefits both Redecard and Cielo.”
Part of the money saved will be reinvested in the company, and the cost of the dismissals will be reflected in Redecard’s third-quarter and fourth-quarter earnings reports, Valor said.
--With assistance from Karen Eeuwens in London. Editors: Richard Richtmyer, Marie-France Han
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