Austria Utility Firm Verbund Plans Additional Job Cuts

By Nicole Lundeen

VIENNA--Austrian utility Verbund AG (VER.VI) is planning additional job cuts until 2020 as it continues with its cost savings plan and refocuses on renewable energy in Germany and Austria, the company said Tuesday.

Verbund told its employees it will be cutting around 180 jobs. The cuts are mostly due to closures and sales in its thermal division, but also as a result of streamlining the company's investment plan last year. The company is planning a further 110 job cuts in management and administration as it refocuses on its core markets. Verbund will also continue with its hiring freeze but said it plans to fill 75 open positions internally.

Verbund has been shifting its focus toward hydropower and wind power in Germany and its home market of Austria. It pulled out of Turkey in 2013, swapping assets with the German utility E.ON SE (EOAN.XE) and sold assets in Italy, France and Bulgaria in 2014. Like other European utilities, Verbund has struggled to make its thermal division profitable as subsidies for renewable energy erode the business of power generation in industrial-scale power plants.

Verbund announced May that it was mothballing or permanently shutting down 2.5 gigawatt of power generation capacity. In October it sold its combined cycle gas turbine power plants in France, which had been put up for sale since the end of 2013. The company said Tuesday that its withdrawal from thermal power production outside Austria was largely complete.

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