Vattenfall has announced 2,500 job cuts by the end of 2014 under its cost-cutting drive with most of the cuts concentrated in Germany, as a result of low electricity prices and production overcapacity. The Swedish energy giant job cuts would be required to reduce costs by 4.5 billion kronor (£470 million). Vattenfall job cuts will affect its administrative divisions, with 1,500 people to be laid off in Germany in in Berlin, Hamburg and Cottbus sites, while 400 job losses will take effect in Sweden and 50 more in a number of other countries.
The Swedish utility company is the fourth-largest generator of electricity in Germany where it has come under massive criticism from environmental pressure groups for banking too heavily on coal-fired plants. Vattenfall is also mulling over selling its power station in Denmark, and part of its power plant in Lippendorf, Germany. Vattenfall CEO Oeystein Loeseth also blamed the cost-saving measures on too many carbon dioxide emissions allowances on the European market. “This new reality requires efforts in further improving our efficiency and strengthening our financial position.”
Deputy chief executive of Vattenfall Ingrid Bonde said that the company is prepared to take on new challenges with divestments, a decreased investment plan, staff reductions and a focus on operational excellence. Elucidating on the measures undertaken by Vattenfall, Ingrid Bonde, said, “We also have to continue evaluating our assets. We have recently announced the potential divestment of our Danish thermal business and the evaluation of a sale of our share of the lignite power plant Lippendorf in Germany. Other initiatives include potential divestments of non-core assets and the evaluation of strategic alternatives for underperforming generation assets.”