FRANKFURT, Sept 21 RWE AG may cut more
jobs than planned as it battles sluggish demand for energy in a
struggling European economy, its chief executive said after
Germany's No.2 utility shocked the market with a hefty dividend
"We will have to make do with fewer employees in the
future," German daily Die Welt cited Peter Terium as saying in
an interview published on Saturday.
His comments come two days after RWE announced plans to
halve its 2013 dividend to 1 euro per share, sending the
company's stock lower.
Terium told Die Welt that investors should consider whether
it still makes sense to pay out high dividends as long as the
company is laden with 33 billion euros ($45 billion) in debt and
its power generation business is suffering.
"Dividends have to be earned and financed sustainably. If
the company is doing its part through de-investments, spending
cuts and lower costs, and if employees shoulder a major part of
the burden, then the capital market has to contribute, too."
Terium told Die Welt he could not yet say how many jobs
would go in the end.
That will depend on how much headcount can be cut via early
retirements, how quickly new businesses such as energy services
take off and how many jobs it moves to nearby lower-cost
Earlier this week, industry sources said RWE planned to axe
3,000 jobs and freeze pay for three years as part of an
efficiency drive dubbed "Neo".
Along with peers E.ON and EnBW, RWE has
come under intense pressure from falling wholesale power prices
in Europe, its core market.
In addition, the strong expansion of renewables has hurt the
profitability of gas plants, as power from solar and wind
sources takes priority in being fed into the electricity grid,
reducing the hours gas plants can run.
($1 = 0.7402 euros)
(Reporting by Maria Sheahan; Editing by Anthony Barker)