CONSOL Energy Cuts 470 Jobs amid Weak Commodity Prices

CONSOL Energy Inc. CNX said that it is cutting its existing workforce by 10% or nearly 470 workers. CONSOL Energy's management had to take this difficult step to lower its operating costs amid falling commodity prices.

CONSOL Energy will lay off 290 employees from its gas and corporate divisions and 180 workers from its Pennsylvania coal mines. We remind investors that the company had laid off about 165 employees from its gas and corporate departments in Apr 2015.

The U.S. coal industry is presently going through a very difficult phase. Declining coal demand and lower commodity prices are taking a toll on the operators. To remain viable, they are idling their mines, lowering headcount, delaying capital expenditure plans and even resorting to an outright sale of the mines.

Downsizing of operations and reduction of workers have become rampant in the industry. This June, Peabody Energy BTU announced that it will lay off nearly 250 employees across its corporate support departments, citing weak market conditions. In early July, Alpha Natural Resources ANR decided to sell some coal mines and a processing unit. The company has provided the required notice to 292 employees working in those facilities.

Sensing the weak coal market conditions, CONSOL Energy has shed a chunk of its coal assets over the past two years to create a natural gas portfolio. This has helped the company to earn profits, when the majority of the coal focused operators were reporting in the red. However, the ongoing weaknesses in commodity prices has finally caught up with CONSOL Energy.

CONSOL Energy currently has a Zacks Rank #2 (Buy). Another well-ranked stock in the same space sharing the same Zacks rank with CONSOL is Cloud Peak Energy Inc. CLD.

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