Dynegy exits trading and cuts jobs

The Houston-based company is to shed a “significant” amount of jobs across its operations. Dynegy said it will announce numbers in the near future, but reports suggest that between 800 and 1,000 jobs will be cut from its total 5,500 workforce. Dynegy’s president and chief operating officer, Steve Bergstrom, has also resigned as part of the company’s withdrawal from trading.

Dynegy has been one of the energy companies hit hardest by the collapse in credit quality, share price and overall confidence in the energy-trading sector. Since its failed attempt to buy Enron in December 2001, it has seen its share price tumble from $46 to below $1, closed its online trading platform Dynegy Direct, and in September paid the US Securities and Exchange Commission a $3 million fee over charges it inaccurately accounted for a $300 million natural gas transaction and engaged in “wash trades” – a trade where two parties buy and sell contracts at the same price to inflate the size of their trading books.

The job cuts and withdrawal from trading are part of a wider restructuring programme that the company hopes will improve operating efficiencies. Dynegy will reorganise its operations into four distinct business units, covering power generation, natural gas liquids, regulated energy delivery and network communications. The four units will report to a corporate head office based in Houston.

Dynegy’s interim chief executive, Dan Dienstbier, said: “The objective of the restructuring is to maximise the potential and profitability of our existing operating divisions by requiring each business unit to develop its own strategy.”

Job cuts are also looming at Duke Power, the generating arm of North Carolina-based Duke Energy. A spokesman said the company will cut “hundreds” of staff over the next few months due to a slowing economy, improved use of technology and centralisation of business operations. Duke Power employs about 10,000 staff.