Alpha to cut about 230 additional jobs
FROM STAFF REPORTS
BRISTOL, Va. — Coal producer Alpha Natural Resources plans to eliminate about 230 positions throughout the company in the wake of continued financial losses, according to an Associated Press report last week
Company officials said Thursday, Oct. 31, 2013, that they have developed a plan to reduce operating and support expenses by at least $200 million in 2014 and beyond. Most of the positions being cut are salaried and about 100 are already vacant and won’t be filled.
Alpha’s corporate headquarters in Bristol, Va., employs about 300 and it has mining operations in Virginia, West Virginia, Kentucky, Pennsylvania and Wyoming .
“These jobs are in numerous locations spread across our entire organization,” Alpha Vice President of Corporate Communications Ted Pile wrote in an email to the Bristol Herald Courier. “I know you’d like some specificity around Bristol but we’re not prepared to go into that level of detail and certainly not before affected employees have been individually informed. That will occur over the next couple of weeks.”
The reductions are part of the company’s effort to better align its overhead and corporate support with its reduced operational footprint.
“Like the other reductions we’ve had to take over the last two years, this is not something we like to do at all, but it’s critical if you’re in the coal business today that you keep your cost structure competitive,” Pile wrote. “We’ve got a smaller group of operations now and we’re better aligning our overhead and support staffing to that.”
Besides the workforce, part of the expected $200 million savings will come from other areas.
“Some of that will come from several different areas that don’t directly impact employees like trimming back discretionary spending and reducing idle mine costs. The elements that do impact people include changes to some HR policies and benefit plans,” Pile wrote.
City Mayor Guy Odum called it bad news.
“I hate to hear that,” Odum said. “With the global coal market the way it is, coal is down right now. It’s sad to hear about people losing jobs this time of year, but until the global coal market comes back it’s going to be tough.”
This marks the fourth round of layoffs in slightly more than a year. In September 2012, the company announced plans to cut production and slash 1,200 jobs. Another 200 cuts were announced in January and about 100 miners in West Virginia lost jobs in July.
The company closed of one of its mines during the third quarter. Weaker demand has driven down the price for metallurgical coal, which is used in making steel, as well as the price for thermal coal, which has fallen as many utilities shift to lower-priced natural gas.
Alpha also on Thursday announced an earnings loss of $458.2 million, or $2.07 per share, for the quarter that ended Sept. 30. That is compared with a loss of $46.1 million, or 21 cents per share, last year. After adjusting for impairment and restructuring costs, as well as other special items, it lost 61 cents per share versus 55 cents per share. Revenue fell 27 percent to $1.19 billion.
“We are encouraged that the metallurgical coal market appears to be gradually improving from its recent apparent low point, and domestic thermal coal inventories have trended down, planting the seeds for healthier market conditions in the future,” CEO Kevin Crutchfield said in a written statement.
For the first nine months of the year, Alpha reported total revenues of $3.9 billion, compared to $5.4 billion in 2012. Coal revenues dropped from $4.7 billion for the first nine months of 2012 to $3.3 billion in 2013.
The company didn’t give a profit forecast but said it expects to ship 86 million to 91 million tons of coal in 2013 and 79 million to 90 million tons in 2014. The company lowered its 2013 expenditure goal to a range of $260 million to $290 million from its prior forecast of $275 million to $325 million.
A share of Alpha stock rose to $7 Thursday on the New York Stock Exchange, up from $6.74 Wednesday, Oct. 30, 2013.
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