Houston-based Reliant Resources Inc. (RRI) confirmed Monday that it is eliminating jobs as part of an overall cost-cutting plan. No other details were provided, however, RRI is scheduled to report its second quarter earnings on Tuesday.

The news of the layoffs came in an e-mailed statement to employees, which read in part that the company would “implement measures that are expected to cut expenses significantly…To achieve this critical goal, we made some extremely difficult decisions to eliminate certain activities and reduce the company’s workforce.”

In response to media inquiries, RRI issued a statement, which read in part that it “has concluded a review of its cost structure and will implement measures that are expected to cut its expenses significantly. The cost reductions will help ensure that Reliant has the right cost structure to be a strong competitor in the current market environment.”

No information on which jobs were eliminated or how many people would be fired was released, although rumors were circulating that the cuts were across the board. Earlier this year, RRI obtained a $6.2 billion financing package, considered critical to its survival, and it disclosed soon after that it would look for ways to save money (see Power Market Today, April 2).

In the first quarter, poor performance of its wholesale energy trading business and the financial effect of the planned sale of its European energy operations slammed RRI’s bottom line. It posted a net loss of $462.4 million, or $1.59 a share in the first three months of 2003.

Earlier this month, long-time executive Stephen W. Naeve announced his retirement, effective Sept. 16. Naeve, who assumed the vice chairman spot in May following 30 years with the company and its predecessor companies, was expected to lead RRI’s efforts to resolve “all outstanding issues” related to its California operations and matters pending before the Federal Energy Regulatory Commission (see Power Market Today, May 15).

Since the formation of RRI in 2000, Naeve had served in a number of key executive management positions, most recently as vice chairman. From May 2002 until May 2003, he was president and COO after having served as the company’s executive vice president and CFO.

In April, Steve Letbetter, chairman and CEO of RRI, resigned and was replaced by board member Joel V. Staff, former CEO of National Oilwell Inc. Letbetter had been appointed to the top jobs at Reliant Energy Inc. in 1999 and then RRI when it spun off from its parent in late 2002.

©Copyright 2003 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.