Cloud Peak Energy, one of Wyoming's largest coal producers, eliminated 15 payroll positions last week, including most of its government affairs team, the company announced on Monday at the Star-Tribune.
All affected employees were offered severance benefits.
The Gillette-based company owns the Antelope and Cordero Rojo mines in Campbell County, the non-operating Youngs Creek mine in Sheridan County, and the Spring Creek mine in Montana. It has been more difficult than some of Wyoming's other major coal producers to cope with the contraction in the coal market since the slowdown, due in part to indebtedness.
In a note sent to employees last week, the company explained that the reduction in positions was meeting the challenges of the current coal market, highlighting the company's recent decision to hire advisors who would review options for the company. Cloud Peak's immediate future, like the sale of the company. .
"This reduction is part of our ongoing effort to adapt our company to the challenging conditions of the industry and the small size of our business," says the note. "Along with the recently announced engagement of external advisors, we believe these steps, while challenging, are necessary to help position our company for the future."
The cuts will reduce the company's activities in government affairs – lobbying efforts from Cheyenne to D.C. – and will eliminate most of the department's spending. Positions related to public affairs will be reduced and the remaining staff will be focused on local operations, according to the note.
The Cloud Peak Employee Policy Action Committee will soon be closed "as the remaining funds are paid out," says the note.
The press service of the company did not immediately comment on the questions sent by e-mail, asking for more details on the dismissals.
The layoffs at Cloud Peak are not the first sign of distress on the part of the company. Altman Z-score Cloud Peak, a notation used to determine the risk of bankruptcy, is in the distress zone. In November, the company announced that it would lighten its balance sheet by reducing retiree health benefits. At the end of the month, the company announced that it had hired consultants to consider various options for its future, including the sale. In December, the New York Stock Exchange had warned the company that its still low prices would lead to delisting or even an improvement. More recently, the company has removed the corporate bonuses to be paid over several years and replaced them with lump sum payments to be paid immediately.
Cloud Peak was the only major publicly traded coal company in Wyoming not to give in during the economic downturn. Unlike its neighbors Peabody Energy, Alpha Natural Resources and Arch Coal, Cloud Peak had not invested in the metallurgical coal boom that had erupted in 2015. But, it was not put in this difficult situation, Cloud Peak did not benefit from the balance sheet cleanup. bankruptcy. He held his debt.
Current pressures on Cloud Peak, and others in the coal industry, are the result of fewer customers purchasing their coal, inexpensive competition from the natural gas and renewable energy energy sector, and the virtual elimination of long-term coal contracts with the electricity industry, on which the producers once depended.
A record number of coal plant closures occurred in 2015, with last year recording the second largest number of retirements. A number of plant closures in recent years have recently purchased Cloud Peak coal, including two power plants in Texas that announced their closure in 2017 and a large Wisconsin coal plant shut down the same year.
Follow reporter Heather Richards on Twitter @hroxaner