Dynegy Inc.’s new chairman and interim CEO told employees in a company memo Friday morning to expect more jobs to soon be cut. In Houston, rumors had been circulating for days, after the administrator of the company’s human resources department resigned (see Daily GPI, Sept. 27).

With a wholesale restructuring going on within the corporate ranks, CEO Dan Dienstbier said the “reduction in force is inevitable….Last week, Dynegy’s Board of Directors approved an organizational restructuring plan designed to prepare the company to continue addressing current market realities, as well as prepare for the future. Over the coming few weeks we will share information with you about the new organizational design and, more importantly, what it will mean to you.

“As part of the plan we will continue our efforts to review strategic options for Dynegy Marketing and Trade, including our European marketing and trading business. We will also restructure our corporate center into a much leaner, decentralized holding company type structure that concentrates on strategy development, financial reporting/consolidation, and performance measurement. The business units will manage their own staff support functions and become largely autonomous entities. The move to this type of structure allows us the opportunity to better ensure cost containment, operating efficiency and performance management. Unfortunately, it also means that a reduction in force is inevitable.

“I realize this is tough news for you to hear. Dynegy employees have been deeply committed to the company since its inception, even during the past very trying months, and we all deeply regret that our current situation has brought us to this difficult place. I do commit to you that we will move through this process as fairly and quickly as possible. We will also do our best to keep you informed.”

Dientsbier ended the memo with a thanks for the employees “patience and continued commitment.”

No specifics were given on how many jobs will be lost in the makeover, nor when they will occur. Overall, Dynegy currently employs about 5,500, with 1,600 in Houston, said Dynegy spokesman John Sousa. Most of the job cuts are expected to be in Houston, and rumors indicate at least 600, or 11% of the workforce, will lose jobs. Others have speculated as many as 1,500 could be dismissed, which would be almost a third of the energy merchant’s workforce.

Sousa declined to comment on the specifics of the memo, telling NGI that the company is “still in the process of developing the restructuring plan.” Part of the restructuring would basically separate Dynegy’s natural gas liquids unit, power generation and Illinois Power, the company’s generation unit. Some speculate that the unit separation would give Dynegy an easier time of selling off pieces of its business to ensure liquidity.

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