Vattenfall axes 2,500 jobs amid low electricity prices

The Swedish energy group Vattenfall said Wednesday that it would axe 2,500 jobs, including 1,500 in Germany, by the end of next year owing to excess supply in Europe's electricity market.

The state-owned group said that the 7.6 percent reduction in its staff was the result of weaker demand for electricity, a glut of carbon emission allowances and surplus production capacity.

"Several cost saving initiatives are now underway, particularly focusing on administrative functions. These measures are expected to reduce the overall headcount by approximately 2,500 employees by the end of 2014," Vattenfall said in a statement.

After Germany, the biggest cuts would be in the Netherlands, where 500 jobs would be axed, and in Sweden, where 400 were to be eliminated.

Chief executive Oeystein Loeseth said that the reductions would be made "in a socially responsible manner and in close cooperation with the employee representatives."

Vattenfall said in February that it had completed a three-year cost cutting plan worth six billion kronor (721 million euros, $937 million) one year ahead of schedule, and announced another three billion kronor in cost reductions for 2013.

On Wednesday it said it would cut costs by another 1.5 billion kronor in 2014.

The company said in 2010 that it would make Germany one of its three strategic markets, and was then hit hard by Berlin's decision in March 2011 to immediately shut down some nuclear reactors in the wake of the disaster in Fukushima, Japan.