Utah-based EnergySolutions lays off hundreds companywide
EnergySolutions, Inc. is laying off about 265 employees worldwide by the year's end, and it began the reduction in force by giving notice this week to as many as 75 Utah workers.
The move is part of a broader restructuring, the Salt Lake City-based nuclear waste company informed the U.S. Securities and Exchange Commission on Tuesday. The layoffs will mean savings of $35 million annually, Gregory S. Wood, executive vice president and CFO, said to federal regulators. At the end of the year, investors will see a charge of between $12 million and $16 million to cover severance, termination benefits, employee relocation expenses and facility costs.
"It's strategic in that it strengthens us," said company spokesman Mark Walker. "This was necessary but this puts us in a position to strengthen ourselves and grow the business."
This year has been a busy one for the company, which sprouted from a homegrown disposal site for mildly contaminated, low-level radioactive waste into a multinational business nearly eight years ago.
June brought a management shakeup the second in just over two years that put board members David Lockwood and Greg Wood in control of the company. Shortly after, EnergySolutions confirmed rumors that it was considering the sale of its European business, which accounts for more than half of the company's profits and employees.
In addition, the company has faced some concerns because the costs of decommissioning the shuttered Zion nuclear power plant in Illinois have been bigger than expected, while the roughly $200 million funding to cover cost overruns has been shrinking. Lockwood and Wood have said previously that the $1 billion project does not look likely to generate the kind of profits expected when the company took on the work.
In Utah, EnergySolutions also has experienced a slowdown at the disposal site. Tooele County Commission Chair Colleen S. Johnson said last week that while the company used to pay about $15 million a year in county mitigation fees seven or eight years ago, this year the site will bring an estimated $2.7 million to the budget. The fees are based on the volume of waste disposed of at the site.
"The economy in general," she said, "has hurt everything."
Rusty Lundberg, director of the Utah Division of Radiation Control, said the company will be responsible for complying with the state's health and safety regulations regardless of any changes in staffing.
"We don't mandate the level of employment," he said, "But we certainly want to be sure they meet their obligations" to operate the mile-square disposal site safely and to ensure there is sufficient financial sureties to cover the costs of closing the site and monitoring it for decades after it closes.
The Healthy Environment Alliance of Utah used the news to push its call for limits on the kinds of waste allowed at the site.
"Last month we learned [in a legislative audit] that Utah regulators aren't providing adequate oversight," said HEAL's Christopher Thomas. "This month we learn that EnergySolutions is laying off staff after seeing its stock price plummet and a dramatic change in leadership. With so much turmoil, regulators need to put the brakes on EnergySolutions' recent proposals to dump dangerous blended waste and long-lived depleted uranium in Utah."
The closing price Tuesday for the company's stock (ES:NYSE) was $2.71 a share, down 5 cents from Monday's closing price. The downsizing was not announced until after the market closed.