E.ON To Bundle Support Functions As Part Of EUR1.5 Billion Cost Cuts

Claudiu Padurean

German utility E.ON AG (EOAN.XE) said Thursday it intends to centralize certain human resources and accounting jobs within the company as part of an ongoing push to reduce operating costs by EUR1.5 billion through 2015, including around 11,000 job cuts.In a written statement, the company said it proposes to reduce 1,200 full-time jobs in human resources and accounting as part of its „E.ON 2.0” cost cutting interview.
MAIN FACTS:
-Under the proposal, similar functions across E.ON will be centralized in shared service units known as Business Service Centers.
-This will yield significant cost reductions, result in greater process standardization, optimize the use of institutional knowledge, and lead to uniformly high standards of quality across all companies in the E.ON group.
-The proposed Business Service Centers will employ around 1,100 people.
-Following extensive analysis, E.ON prefers two Business Service Centers locations: the German capital Berlin and the Romanian city of Cluj.
-Under the proposal, the Berlin location will have about 500 full-time equivalent positions specializing primarily in human resources services, while the Cluj location will have 600 FTEs providing mainly accounting services.
-E.ON is currently looking into the specific arrangements for both locations.
-About 1,400 employees will continue to work in human resources and accounting functions in E.ON’s existing steering, operating and support units.
-It is anticipated that the proposed measures will be fully implemented by 2015.

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