Exelon cuts 500 to save costs

Friday, 19 June 2009

Jobs are being lost at one of the world's largest nuclear utilities in a search for efficiency during "today's difficult economic and business circumstances."

 

Not a former Exelon staffer, but someone with time on their hands nevertheless (Image: lobstar28)

A severance plan announced yesterday included 400 corporate support jobs, mostly at Exelon's headquarters in Chicago, Illinois as well as 100 management jobs at subsidiary ComEd. In addition will come pay freezes for executives "as well as reduced annual and long-term incentive compensation." A spokesman said it was too early to say whether any specific business areas would be especially affected.

 

The moves, along with some other spending reductions across the group should cut $350 million from next year's costs, Exelon said, largely balancing a 4% rise it was otherwise expecting. However, the company is planning to pay out up to $40 million to settle with its former employees.

 

Following the redundancies, Exelon said it would "operate with a significantly smaller corporate staff." Chairman and CEO John Rowe said, "Eliminating even a single job is painful, but we must reduce the size of our employee team in order to achieve the leaner and more efficient organizational structure required by today's difficult economic and business circumstances."

 

As well as money-saving, the changes are also meant to adapt the company to better reflect the commodity-driven nature of modern power generation.

 

Exelon lost certain credit facilties with the collapse of Lehman Brothers, but announced in October 2008 that the issue would not have a significant impact. At that time Exelon said its results demonstrated the "underlying strength" of the operating performance in its generation department.

 

Exelon employs over 19,000 people and owns and operates 17 large nuclear power reactors. It is in the middle of a credit-crunch bid to take over NRG Energy, which has two reactors among its fleet. A combined entity would have 18,000 MWe of nuclear capacity among a mix of 47,000 MWe, but the NRG board is sternly resisting Exelon's move.