Blue Chip Bulletin: National Grid to cut jobs on US savings drive

31 Jan 2011 | News - Comment now

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Blue Chip Bulletin: National Grid to cut jobs on US savings drive

National Grid has announced a restructuring and cost reduction programme in its US operations, aiming to reduce operating costs by £125 million ($200 million) per year.

The programme will see 1,200 positions cut in its US employee base as part of its target of increased returns from its US business.

In a senior management reshuffle Tom King will become executive director and president of the US operations from April. Nick Winser will become executive director of the UK with responsibility for all UK business and gas distribution.

Current executive director for gas distribution Mark Fairbairn will step down from the board and leave the company at the end of March.

In a trading update, National Grid said cold weather in the US and a number of other one-off items had helped drive strong operational and performance momentum in its first half.

Steve Holliday, chief executive at National Grid, said, 'We are positioned for a particularly strong year, driven by profit growth in our US business and a number of timing items.

'We have today announced that we are taking decisive action to restructure the US business to improve accountability, efficiency and productivity.'

He added, 'In the UK, we are at the beginning of a two year process for resetting price controls for our UK transmission and gas distribution businesses.

'We remain confident of a positive outcome - that is, one which provides appropriate returns on our very significant investment programme.'

Holliday said its US gas distribution business had performed well, adding customers and income from new rate plans.

The company also highlighted the impact of rising inflation on its UK revenues, which will increase. However, this will be partially offset by the inflationary impact on its index-linked debt.

Related topics: Energy, FTSE 100, National Grid, Oil & Gas

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