State leaders have reached out to Constellation Energy, Gov. Martin O’Malley said Thursday, hoping to soften the blow of more than 800 jobs the Baltimore company plans to cut from its payroll through next year.
Approximately 400 of those jobs will come from the Baltimore area as the company deals with a tough economy and a failing energy commodities business.
O’Malley said Department of Labor, Licensing, and Regulation Secretary Thomas Perez has discussed the situation with Constellation executives and reviewed state assistance options for those workers.
“We’re going to be working with Constellation and displaced workers to help them through this rough transition,” O’Malley said following an event at the Port of Baltimore on Thursday afternoon. “Tom Perez is on top of this, working with leadership of Constellation.”
Constellation representatives confirmed the 8 percent reduction in the company’s work force, much of which will come from its energy trading division, the sector that dragged Constellation’s fortunes down in September.
“We’re suffering the effects of a prolonged and deep recession,” Constellation spokesman Rob Gould said. “This is a significant shift in our business.”
In a letter to employees Wednesday, Constellation Chairman, President and CEO Mayo Shattuck said the cuts would come from layoffs at its Baltimore headquarters as well as the sale of its commodities operations in London and Houston, where employees may keep their jobs under different ownership.
Shattuck said that smaller reductions would take place at Constellation subsidiary Baltimore Gas and Electric and other power generation holdings. Some of the cuts will take place in the “near term,” he said, while others will occur next year.
“I deeply regret this action but it’s a necessary and responsible step we must take,” Shattuck wrote in the memo. “I assure you this decision was the result of thoughtful deliberations and was taken only after many other cost-cutting options were considered and implemented.”
Over the last several months Constellation has begun unwinding the riskier sections of its portfolio and attempted to largely exit the energy commodities trading business.
Among those in the energy trading division is Henry Hager, the son-in-law of President Bush who moved to Baltimore and took a job with Constellation earlier this year. Gould would not say whether Hager was among those to be laid off.
