Hydro Tasmania has announced it is cutting its workforce by nine percent as it prepares for profits to fall below $20 million in the 2014-15 financial year, less than one-tenth of current levels.
In a statement, the company said that the cuts will help the Australian firm "better manage the financial and market challenges it faces in the next few years". It said that while the business has provided strong returns to government over recent years, and is again on track to return a record underlying profit this year, the financial outlook for the next few years is challenging.
The drop in profit, first flagged at the release of last year's financial results, has been put down to the result of a range of factors, including the softening demand in the National Electricity Market and the effect of the repeal of the price on carbon on market prices, uncertainty about the future of the Renewable Energy Target, the impact of the energy reform process and the ongoing downturn in the consulting market.
Hydro Tasmania has already implemented business-wide process improvements, and said it is working to maximise the benefits of those changes. An internal restructure has been underway for the last three months to ensure Hydro Tasmania is delivering its core business to its customers with the greatest possible efficiency.
CEO Steve Davy said the business had already requested expressions of interest from people for voluntary redundancies and a number of people had left as a result. It is expected that the remaining positions will go through a combination of voluntary redundancies, natural attrition and compulsory redundancies with around 50 positions to be impacted at Hydro Tasmania alone. The continued downturn in the consulting industry will also have an impact on positions at consulting business Entura similar to last year's round of redundancies that saw a 16% reduction in numbers.
The current process is expected to be concluded within the next two months.
