Diethelm Kuhnt, chairman of German utility RWE, said falling profits forced him to cut 12 500 jobs.

RWE reported its operating profit this year to be 15 per cent lower than in 1999, due mainly to a 30 per cent fall in income from its energy activities. The massive job cuts at RWE mark the end of the corporate culture that had been called “Rente, Wohlstand und Entspannung” – retirement, wealth and relaxation. RWE has a generous corporate pension scheme.

RWE merged with VEW last year, and argues that, after slimming down, it would be leaner and well able to compete once Europe fully liberalises its power market. It plans to save $770 million in annual synergies in addition to other restructuring and cost-cutting programmes. It is also raising an estimated $14 billion from the sale of its non-core businesses.

Experts believe that this will allow RWE-VEW to be able to go on a buying spree in Europe.