Chicago-based Peoples Energy on Monday said it has cut its workforce by approximately 410 employees in order to shrink the company’s labor-related costs.

The company said it eliminated about 110 salaried positions, or about 10% of the company’s non-union workforce at its two gas distribution utilities (Peoples Gas and North Shore Gas) and in its corporate support areas. At the same time, it noted approximately 300 employees have accepted voluntary severance packages that accompanied Peoples Energy’s restructuring effort.

As a result of these actions, which take effect Sept. 30, People Energy said it expects to reduce labor-related costs by approximately $15 million is fiscal 2005.

In the fourth quarter of this year, the company said it will record a charge of approximately $17 million, or 27 cents per share, related to the voluntary severance program. In addition, a non-cash pension settlement/curtailment expense of about $14 million, or 22 cents per share, will be recognized in the first quarter of fiscal 2005, it noted.

Fiscal 2004 GAAP earnings are now estimated to be in the range of $2.20 to $2.30 per share, including the 27 cents per share restructuring charge, according to Peoples Energy. Excluding this expense, ongoing operating earnings (non-GAAP) are expected to be in the range of $2.50 to $2.60 per share, down from the company’s previous estimate of $2.60 to $2.70 per share, it said.

Fiscal 2005 GAAP earnings are likely to be in the range of $2.50 to $2.65 per share, including the 22 cents per share non-cash pension related expense associated with the restructuring, Peoples Energy noted. Absent this expense, ongoing operating earnings (non-GAAP) would be in the range of $2.75 to $2.90 per share, including estimated labor savings related to the restructuring of about 25 cents per share.

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