RWE to cut further 2,400 jobs: source

Fri Aug 10, 2012 7:49am EDT

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DUESSELDORF, Germany (Reuters) - RWE (RWEG.DE) has decided to cut a further 2,400 jobs by end-2014, a person familiar with the matter told Reuters on Friday, as Germany's No.2 utility trims costs to ready itself for a nuclear-free future.

The cuts are on top of 8,000 job losses announced in late 2011. RWE declined to comment. Reuters reported on Thursday that RWE management had presented plans for more job cuts.

Chief executive Peter Terium - who took up the role in July - was expected to announce the new job cuts with first-half results on Tuesday, August 14. A different source has previously said Terium was not ruling out compulsory redundancies.

Analysts were expecting a solid first-half performance due to the absence of one-off charges last year related to Germany's decision to exit nuclear power.

Germany's nuclear exit plan caused billions of euros in writedowns and triggered asset sales and job cuts at major utilities E.ON (EONGn.DE) and EnBW (EBKG.DE) and RWE.

Terium has made it clear RWE will undergo a major reorganisation as he tries to reposition a group that was defined for years by the "nuclear rambo" approach of his predecessor Juergen Grossmann.

Under Terium, RWE will move away from nuclear power and increase efforts in renewable energy, in which the company plans to invest 5 billion euros ($6.2 billion) over four years.

In total, RWE is cutting about as many jobs as peer E.ON, which last year announced it would slash up to 11,000 jobs.

The 2,400 new job cuts will affect mainly administrative units such as accounting, human resources and finance, while roughly 40 percent of the already announced 8,000 cuts are a result of asset disposals worth 7 billion euros by end-2013.

About 1,100 jobs have been reduced through the sale of former units Thyssengas and transmission grid firm Amprion, while 1,600 jobs were eliminated through attrition, the source said.

($1 = 0.8124 euro)

(Writing by Christoph Steitz; Editing by Dan Lalor)

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