RWE prepares for more cuts

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The head of RWE has told the company’s employees that the austerity programme initiated by the company hasn’t gone far enough.

Peter Terium’s internal announcement is reported in Handelsbatt newspaper. The report says that the company is about to announce another round of cuts as part of its ‘Lean Steering’ programme, this time targeting the group’s administration. It is expected that the company will slash its administrative costs by as much 30 per cent through a new series of measures to be implemented from the middle of the month.
RWE has been hurt by the impact of the German government’s Energiewende policy, which has severely affected its core business of coal and gas.

The recent austerity measures were not enough, management have already announced internally to employees according to a report.

The announcement stated that "current view makes it clear that this is not enough to bring the group back on track". According to "Handelsblatt" the new cuts programme will start in mid-April initially, with more to follow by the end of June.

Dr Michael Murphy, spokesperson for RWE told Power Engineering International, that the company's plans in the area of efficiency-enhancement stretch back to their March 2014 press conference on the subject.

"We announced increasing our efficiency-enhancement programme from EUR1.5bn by the end of this year by a further EUR500m to be reached by 2017. The background is that by the end of 2014, EUR1.4bn of efficiency enhancements could be reached and the programme is therefore underway and (progressing) better and faster than expected."

"To reach these goals there are a row of measures, including Lean Steering 2.0 which involves the sinking of costs in back office areas. As the name 2.0 suggests, these measures are in conjunction with processes already running."

"Next to these cost reduction measures are further measures to improve efficiency, which also have an important contribution in achieving our targets. For example, improved commercial control of power plants as well as measures to gain new customers in our retail area."


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