In the latest sign of struggles for the coal industry, the world’s largest private-sector coal company announced plans to eliminate 250 corporate and regional positions across the United States. Peabody Energy said the cuts represent roughly 25 percent of corporate and regional support positions and will result in $40 million to $45 million in annual savings.
“Today’s announcement represents another necessary step to drive the company lower on the cost curve,” Peabody President and CEO Glenn Kellow said in a statement released Monday.
About 50 jobs will come from the company’s St. Louis headquarters, the St. Louis Business Journal reports. Other reductions will come from the planned closure of offices in Evansville, Indiana, and Gillette, Wyoming, according to the statement.
Peabody has lost more than $1.8 billion since 2012, according to the Business Journal. In the first three months of this year, the company's revenue was $1.54 billion, down from $1.63 billion in the same period a year ago, Peabody told investors in April.
The domestic coal industry has struggled to compete with cheap natural gas unlocked by new shale drilling techniques. In recent years, global demand for coal has dropped too, as China -- the world’s largest producer and consumer of the energy source -- suffers from oversupply. New regulations from the Environmental Protection Agency to cut carbon emissions from U.S. power plants and mounting global concern over coal’s climate footprint also cast a shadow over the industry’s long-term future.
Earlier this month, the American Coal Company, a subsidiary of Ohio-based Murray Energy, warned of possible layoffs in August at its mining complex in Galatia, Illinois. Last month, West Virginia’s two largest coal producers -- Alpha Natural Resources and Murray Energy -- told 2,200 workers they would be laid off in 60 days.
“It’s reached probably the bottom of the trough,” energy analyst Bob Hodge told West Virginia MetroNews after last month’s layoff announcements. “You’re going to see the cuts. You’re going to see the drop in production.”
In Tuesday's early trading, Peabody's stock rose 6.7 percent to $3.27.