13 Feb 2013

Contact Energy to cut jobs across the board

10:32 pm on 13 February 2013

Contact Energy plans to cut more than 100 jobs in the face of flat demand for electricity.

New Zealand's biggest listed electricity company has just reached the end of a $2 billion spending programme on new power stations.

Contact chief executive Dennis Barnes told senior managers on Tuesday of plans to cut about 10% of the company's 1100 workforce. Workers were informed on Wednesday.

Spokesperson Nick Robinson told Radio New Zealand's Checkpoint programme on Wednesday the cuts will not target any particular location or types of jobs, but will be across the business.

"The head count reduction is part of a programme of a number of initiatives to remove costs.

"This will be unsettling to employees ... We aim to do this in a very fair and transparent manner and that's why we've indicated early to employees that we've begun this organisation design."

The Labour Party says Contact Energy's decision is another reason why the Government should abandon its plan to partially privatise its power companies.

State-owned enterprises spokesperson Clayton Cosgrove said on Wednesday his party had predicted that this would happen some time ago.

"This was a state-owned asset, started off majority ownership in New Zealand. It didn't take long - I think it's now 70 percent or the overwhelming majority is foreign ownership.

"These people don't invest for charitable purpose - they want money. In a flat demand situation how do you do that - you restructure. You either hike your price or knock down your cost. That means human beings and jobs."

Mr Cosgrove said there is no sense in the Government's partial privatisation programme when the electricity market is flat.