The body count of lost energy traders and related support staff climbed higher Thursday, after Williams Cos. downsized its staff by another 100 employees, Reliant Resources Inc. cut close to 135, and Albuquerque-based PNM Resources Inc. eliminated 85 positions. The new cuts followed those just days ago by Houston’s UBS Warburg Energy, which fired 100 of its energy trading staff (see Daily GPI, Aug. 21), and Duke Energy Corp. said it was considering reducing its 500-member trading force to “fit” the current conditions.

Tulsa-based Williams Cos Inc. eliminated 125 within its energy merchant unit in June, and has slowly been paring down positions in recent weeks, warning employees a few weeks ago that more layoffs were imminent. It also plans to cut about 70 in its London office by mid-September. Most of Thursday’s layoffs were in the Tulsa headquarters, and three others were fired in Houston. Williams so far has eliminated close to 300 trading-related positions, leaving it with a workforce of about 500. The trading unit lost $497 million in the second quarter.

“Our business environment has been subject to significant turmoil over the last few months,” Williams wrote in a memo to employees. “These circumstances have negatively impacted our ability to trade and compete for new structured energy transactions.” Spokeswoman Paula Hall-Collins said, “We anticipate that there will be additional reductions announced over the next few weeks. It’s going to go on for a while.”

Houston-based Reliant Resources announced that it would cut up to 135 within its energy merchant services, which it said Thursday was a response to poor energy trading conditions industry wide. Most of the cuts are in Houston, and are either within the trading staff or in support jobs including information technology. Company-wide, Reliant Resources employs close to 6,300, and about half are based in Houston. The company had already eliminated about 50 positions in June, and had also cut 22 of its contract positions.

“Layoffs are always difficult, but we have an obligation to all of our employees and shareholders to make necessary business decisions and maintain our financial strength,” Reliant’s Richard Wheatley said. “Business conditions will have a bearing on our staffing needs in the future.”

Meanwhile, PNM said Thursday announced it was realigning the company, and plans to consolidate “several areas” to reduce operation and maintenance costs and reorganize “back into a more traditional utility structure.” PNM’s principal subsidiary is Public Service Company of New Mexico, which provides power and gas utility services to about 1.3 million in New Mexico, and sells wholesale power in the western United States.

PNM said in a written statement that “like many other energy companies, [it] has been hurt by the troubled power trading market where prices have been low and trading activity has been sluggish.” It said it also was implementing process improvement initiates to reduce costs, which overall will affect 85 employees.

“For the past six months, we’ve looked at our business top to bottom to determine the best way to maintain the long-term health and growth of our company in an ever-changing and increasingly difficult energy market,” said PNM CEO Jeff Sterba. “Unfortunately, difficult decisions have to be made. These changes, which affect departments at all levels, are part of our ongoing process to improve our efficiency while retaining our commitment to improving service quality for our customers.”

PNM said it was also responding to market conditions by “redeploying resources to focus on long-term power agreements, instead of daily wholesale market activity,” and has scaled back its generation development and construction operations. It added that it has not eliminated plans to invest in new generation.”

In 2000, PNM began separating the company into business units in anticipation of a competitive electricity market in New Mexico. “The delay in deregulation, which was postponed until 2007, combined with the unstable wholesale electricity market nationally and regulatory and political uncertainty caused the company to make these workforce changes,” it said in a statement.

As part of the realignment, Sterba also announced the appointment of Roger Flynn as chief operating officer. Flynn was most recently PNM’s executive vice president in charge of the regulated retail electric and gas delivery businesses, including operations, engineering, construction and customer service. In his new role, Flynn also will be responsible for PNM’s generation portfolio, including its stake in both San Juan Generating Station, in northwestern New Mexico, and Palo Verde Nuclear Generating Station in Arizona. He also will oversee PNM’s wholesale marketing efforts.

©Copyright 2002 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.