RWE have announced an improved earnings performance on last year for the first half of 2012, but are still set to shed up to 2,400 jobs in an attempt to cut $1.2bn in annual costs by 2014, as recession continues to reign in Europe.
It is significantly less than the 5,000 jobs trade unions feared would be lost, and forms part of a plan by the company to re-structure its power generation business.
“These HR measures are essential to maintaining the market competitiveness of RWE,” said Peter Terium, RWE’s new chief executive.
“The present framework conditions are anything but favourable. Mounting state intervention in the energy sector, shrinking power plant margins and fierce competition in electricity and gas supply are all challenges we are facing.”
The job losses are a part of its ‘RWE 2015’ programme, aiming to improve earnings by $1.2bn per year. Germany’s second-biggest energy group by market capitalisation, plans to reduce costs in services and administration and form a pan-European generating company for its German, UK and Dutch power stations, integrating its coal and gas fired power plants.
The new company, to be called Societas Europaea (SE), and based in Germany, is scheduled to start operating at the beginning of 2013, and would manage all conventional power plants of RWE Power, RWE npower and Essent in future.
‘The new structure will allow the Group to respond more quickly to the rapid pace of change within the electricity market’, according to a press statement.
RWE’s first-half results were helped by a better performance from its energy trading unit and an agreement on long-term oil-linked gas supply contracts with Statoil. However, unlike its rival Eon, RWE is yet to conclude a similar agreement with Gazprom.
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