San Jose, CA, April 4, 2006 — Bankrupt power producer Calpine Corp. announced additional steps to streamline the company by cutting jobs and selling non-core power plants in an effort to continue in their restructuring efforts. This brings the company’s announced lay off total to over 1000 jobs.
Calpine has identified for potential sale a number of non-core and non-strategic power plants. The company is also closing three additional offices, and, as the company completes asset sales and construction activities, will reduce its workforce by 775 employees.
Robert P. May, Calpine’s CEO, stated, “We are refocusing Calpine’s resources on what we do best, power generation. We’re downsizing our portfolio and market reach, and focusing on core assets and markets where Calpine can best compete.”
A systematic review of the entire company has identified approximately 20 power plants in operation or under construction that are no longer considered to be core operations due to a combination of factors, including financial performance, market prospects, and strategic fit, according to a recent press release from Calpine. Accordingly, the company will be seeking to sell the majority of these assets by the end of 2006. At the completion of this effort, Calpine expects to retain a generating portfolio of geothermal and natural gas-fired power plants located in key North American markets.
To further reduce costs, Calpine has initiated measures to close offices in Atlanta, Ga., Boston, Mass., and Dublin, Calif. Business operations will be primarily consolidated into Calpine’s San Jose, Calif. headquarters as well as offices in Houston, Texas, and Folsom, Calif. As a result, Calpine will cut staffing by approximately 775 positions, the majority of which will take place by the end of 2006 as the company completes both plant sales and construction activities. Approximately 100 employees will be immediately affected.
“Together with our cost-cutting actions announced in February, we will reduce our annual costs by over $150 million,” May added.
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