Allegheny Cuts Jobs, Cancels 2 Plants
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Allegheny Energy Inc. said it will cut 600 jobs, or 10% of its work force, and cancel construction of two power plants to help cut costs after an unexpectedly weak first half.
The company--with customers in parts of Maryland, Ohio, Pennsylvania, Virginia and West Virginia--also lowered its 2002 earnings estimate by more than 25%, citing lower wholesale energy prices, mild winter and spring weather and substantially decreased energy trading since the collapse of Enron Corp. Allegheny invested heavily last year in energy-trading operations.
The job cuts will reduce costs by about $5 million this year and by $40 million to $50 million annually in coming years, the Hagerstown, Pa.-based company said.
The news sent Allegheny Energy’s shares down $2.08 to $23.95 on the NYSE.
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