AGL Energy is set to reduce its workforce by up to 300 positions as the company shifts away from coal and invests heavily in renewable energy and battery storage. The decision comes as AGL aims to allocate up to $20 billion by 2035 to transition its energy production, focusing on sustainability while navigating market changes.
The move will impact management and operational roles across AGL’s various operations. The company, which counts tech billionaire Mike Cannon-Brookes as its largest shareholder, has initiated consultations with staff regarding the planned reductions. An AGL spokesperson explained that these changes are part of broader efforts to enhance productivity and maintain competitiveness in a rapidly evolving market.
Transition to Renewable Energy
AGL’s job cuts are closely linked to its strategy to phase out ageing coal-fired power stations in favor of low-emission energy sources. The company plans to develop approximately 12 gigawatts of new solar, wind, and battery capacity, increasing its renewable and storage assets target from 5 gigawatts to 6 gigawatts by 2030. This shift is crucial as AGL confronts increasing pressures from investors, governments, and customers to decarbonise while ensuring profitability.
Cannon-Brookes has been advocating for accelerated emissions reductions and larger investments in renewable energy. Meanwhile, other stakeholders urge AGL to prioritize capital discipline to protect dividends. The company anticipates that its near-term earnings may be affected, projecting an underlying profit of between $500 million and $700 million in 2026, a decline from an estimated $640 million for 2024-2025.
Union Response and Worker Concerns
The impending job losses have sparked significant backlash from unions. Grahame Kelly, general secretary of the Mining and Energy Union, characterized the cuts as a “kick in the guts” for workers, particularly with the holiday season approaching. He expressed concern about the stress and uncertainty faced by coal-fired power station workers across Australia due to shifting timelines for station closures.
The union has indicated that AGL intends to seek expressions of interest for voluntary redundancies, with forced redundancies remaining a possibility if targets are unmet. The job cuts are expected to take effect in the first week of December 2023. Kelly emphasized the importance of transitioning support for workers, particularly with the federal government’s Net Zero Economy Authority framework now in place.
The union is urging AGL to act responsibly towards its dedicated workforce, which has contributed significantly to the country’s energy needs over decades. There are concerns that the speed of these job cuts may bypass necessary retraining and redeployment obligations in the future. The union has called for government intervention to safeguard workers at the Bayswater and Loy Yang A power stations as these facilities near closure.
AGL is expected to finalize consultations in the coming weeks, with decisions regarding affected roles anticipated before the end of the year. The company’s actions will reflect its commitment to transitioning toward a sustainable energy future while addressing the needs of its workforce during this significant transformation.
