1,000 jobs to go at Swedish energy giant
UPDATED: One thousand workers are set to be let go after Swedish state-owned energy company Vattenfall announced major staff cuts on Tuesday morning, in a bid to curb costs.
The layoffs were revealed when Vattenfall presented its first quarter of the year report on Tuesday morning, in which the firm announced profits of almost five billion kronor ($580.27 million), compared to 8.2 billion in the same period last year.
"The demand for electricity has in the first quarter of the year continued to be weak and electricity prices have continued to fall," Vattenfall CEO Magnus Hall said in a press statement.
State-owned Vattenfall, a major provider of electricity in northern Europe and Britain, is now set to tighten the belt in a bid to curb losses, including speeding up the sale of its German brown coal plants and axing jobs. It has recently created six new operative areas: heat, wind, customers and solutions, generation, markets and distributions.
"At the same time we need to keep decreasing our costs and will reduce the number of employees by what corresponds to around 1,000 full-time jobs, half of which in staff roles. The new organization provides the conditions we need to operate a strong Northern European company," said Hall.
Vattenfall has previously struggled amid the harsh market conditions. As The Local reported last month, it could face asset write-downs of around eight billion kronor due to falling energy prices.
Since the Vattenfall Group bought energy giant Nuon in 2009, a deal which has been hotly debated in Sweden, the firm's assets have been written down by over 52 billion kronor. The final payment instalment is due on July 1st this year, when Vattenfall is obliged to buy the remaining 21 percent for a previously agreed sum of 19.2 billion kronor.
The company reported in February that it had been able to curb some of its losses in 2014. In its annual report, the company revealed a net loss of 8.18 billion kronor last year, which was an improvement on the 13.67 billion loss the year before.
"2014 was an eventful and challenging year that was characterized by weak demand, a surplus of production capacity and falling electricity prices," Hall said in a statement at the time.
The main explanation for the year's negative result was asset write-down charges worth 23.8 billion kronor, said Hall.
Many energy providers in Europe have made huge asset write-downs in the last two years because of weak demand for electricity against a background of sluggish economic activity.
They have also been caught out by the US shale energy boom, which has pushed down the price of coal for power generation, undermining the profitability of new gas-powered plants and some investment programmes.
Vattenfall, which employs more than 30,000, and has operations in Sweden, Finland, Denmark, Germany, the Netherlands and Britain did not specify where the lay-offs would take place.
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The layoffs were revealed when Vattenfall presented its first quarter of the year report on Tuesday morning, in which the firm announced profits of almost five billion kronor ($580.27 million), compared to 8.2 billion in the same period last year.
"The demand for electricity has in the first quarter of the year continued to be weak and electricity prices have continued to fall," Vattenfall CEO Magnus Hall said in a press statement.
State-owned Vattenfall, a major provider of electricity in northern Europe and Britain, is now set to tighten the belt in a bid to curb losses, including speeding up the sale of its German brown coal plants and axing jobs. It has recently created six new operative areas: heat, wind, customers and solutions, generation, markets and distributions.
"At the same time we need to keep decreasing our costs and will reduce the number of employees by what corresponds to around 1,000 full-time jobs, half of which in staff roles. The new organization provides the conditions we need to operate a strong Northern European company," said Hall.
Vattenfall has previously struggled amid the harsh market conditions. As The Local reported last month, it could face asset write-downs of around eight billion kronor due to falling energy prices.
Since the Vattenfall Group bought energy giant Nuon in 2009, a deal which has been hotly debated in Sweden, the firm's assets have been written down by over 52 billion kronor. The final payment instalment is due on July 1st this year, when Vattenfall is obliged to buy the remaining 21 percent for a previously agreed sum of 19.2 billion kronor.
The company reported in February that it had been able to curb some of its losses in 2014. In its annual report, the company revealed a net loss of 8.18 billion kronor last year, which was an improvement on the 13.67 billion loss the year before.
"2014 was an eventful and challenging year that was characterized by weak demand, a surplus of production capacity and falling electricity prices," Hall said in a statement at the time.
The main explanation for the year's negative result was asset write-down charges worth 23.8 billion kronor, said Hall.
Many energy providers in Europe have made huge asset write-downs in the last two years because of weak demand for electricity against a background of sluggish economic activity.
They have also been caught out by the US shale energy boom, which has pushed down the price of coal for power generation, undermining the profitability of new gas-powered plants and some investment programmes.
Vattenfall, which employs more than 30,000, and has operations in Sweden, Finland, Denmark, Germany, the Netherlands and Britain did not specify where the lay-offs would take place.
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