June 2013: Global gold miner Newmont Mining Corp. plans to cut its Colorado workforce by at least a third over the next 90 days.
The company (NYSE: NEM), headquartered in Greenwood Village, employs about 750 people in Colorado, according to a spokesman.
Newmont's president and CEO, Gary Goldberg, on Wednesday blamed the volatility of gold prices and “steadily rising costs” for pushing the company cut costs.
“Ongoing price volatility and steadily rising costs create intense pressure for Newmont to continuously improve its efficiency and effectiveness,” Goldberg said.
“We face some very difficult decisions in streamlining our organization and are committed to treating people fairly throughout this process. Ultimately, we cannot postpone the work we need to accomplish now to create sustainable value for our stakeholders into the future,” he said.
The layoffs come as the company streamlines its “operating model” to “sharpen its ability to create value for shareholders and other stakeholders,” the company said in a statement.
Newmont’s new model will shift responsibility for production and profits to its operating teams, while the corporate headquarters focuses on overall strategy and governance, the company said.
Gold prices climbed steadily from less than $400 per ounce in 2004 to peak at around $1,900 per ounce in August 2011. Wednesday, prices closed at $1,377 per ounce Wednesday, down from about $1,600 per ounce in early March.
In April, Newmont reported its first-quarter profit declined 36 percent from a year earlier in the face of a 11 percent drop in gold production, missing Wall Street earnings and revenue estimates. Shares closed at $33.33 today, down from a recent high over $57 last September.
“As we went through the bull market, companies across our industry were staffing up,” said Newmont spokesman Omar Jabara. “As the bull market is winding down ... the need for an expanded workforce is no longer there.”
While the overall number of layoffs from Newmont’s Colorado staff is expected to be in the hundreds, an exact figure isn’t known at this time," Jabara said.
And while Newmont is shifting more responsibility to its operating teams, that doesn’t necessarily mean that the headquarters jobs lost in Colorado will be disbursed throughout the world, Jabara said.
“The operating model shift will have implications elsewhere, but right now we don’t know what that will look like,” Jabara said.
Newmont directly employs about 16,000 people around the world, a figure that climbs to about 40,000 people including contractors, he said.