126 people are being laid off at Babcock & Wilcox's Summit County operations, and the company says you can blame lower coal generation.

B&W spokesman Ryan Cornell tells WAKR.net that the company will reduce its workforce by 113 people in Barberton and 13 people in Copley.

The layoffs affect nearly 13 percent of the Summit County B&W workforce.

And those reductions locally are a large part of the over 200 people being laid off throughout B&W's operations.

Cornell says that B&W is in the "energy technology business", and says the coal generation market will continue to drop, and that drop is happening faster than expected.

After the layoffs, B&W will employ 737 people in Barberton, and 120 people in Copley.

The city of Barberton says the layoff news came as a surprise, and said there was no indication of workforce reduction when city officials talked with B&W as recently as last week.

Barberton mayor Bill Judge says his office will do whatever it can to help families impacted by a job loss.

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(Babcock & Wilcox, news release) Babcock & Wilcox Enterprises, Inc. (B&W) (NYSE:BW) today announced actions to proactively restructure its traditional power business in advance of a lower projection for U.S. coal generation and has updated guidance for 2016 to reflect:

* The net impact of the restructuring and decreased coal-related revenue in the second half of 2016.
* A charge to correct an engineering design error on a new build renewable energy plant in Europe. The resulting re-engineering, on-site rework and delivery delay will result in a $32 million pretax charge in the quarter and a full-year ($0.51) EPS impact.
* The shift of $38 million in 2016 expected revenue from a Canadian oil sands project that was delayed due to the impact of the Fort McMurray fires.

Revised earnings guidance for adjusted EPS is now $0.63 to $0.83, primarily due to the effects of the renewable energy project and the timing shift of the Canadian oil sands project. The restructuring savings largely offset the impact of expected lower coal-related revenue. Revenue guidance remains unchanged at $1.8 billion as the incremental revenue from the SPIG acquisition, which is anticipated to close early in Q3, is expected to approximately offset the other revenue impacts.

Traditional Power Business Restructuring

B&W is restructuring its traditional power business that serves coal-fired power generation to reduce overhead and improve efficiency in response to projections that coal utilization, particularly in the U.S., will decline faster than previously forecast. The new organizational structure includes a redesign of workflow for its North American-based coal power generation resources to provide an effective, flexible organization that can adapt to the changing market conditions.

As part of these changes, B&W will eliminate over 200 positions in North America immediately and undertake other cost-savings measures across the enterprise. The company also expects additional facility consolidations in the coming year.

Severance expenses and other costs over the next 12 months will be approximately $55 to $60 million, of which approximately $30 million are non-cash and include the write-down of B&W's one coal power plant and deferred tax assets related to the India manufacturing joint venture and various state net operating loss carryforwards. These savings are expected to allow the coal business to hold gross margins constant in the coming years despite the expected decline in volume.

B&W is consolidating aftermarket and global new build activities for coal-fired generation into one segment that will be led by Mark Low, Senior Vice President of the new Power segment. All renewable energy projects, including the B&W Vølund subsidiary, will be consolidated into another segment, led by Paul Scavuzzo, Senior Vice President of the new Renewable segment. This new structure will allow for a Power segment focus on efficiency and support for our traditional customer base while the Renewable segment focuses solely on renewable project execution and worldwide growth.

"We have reduced the size of our organization that supports the coal market by roughly 20% and restructured how we support this market," said E. James Ferland, Chairman and Chief Executive Officer. "These changes will allow us to continue to provide outstanding service to our customers and maintain solid profit margins in our power business despite an expected 15-20% reduction in U.S coal customers' demand for our parts and services by 2017 or 2018."

European Renewable Energy Project

During construction, B&W self-discovered a deficiency in the piping design of one of our renewable waste to energy projects. The correction requires engineering and then physical rework. B&W is working closely with our customer to minimize any delays and ensure the delivery of a high-quality facility that meets or exceeds all performance guarantees. "Our B&W Vølund subsidiary has completed 25 projects in the last ten years," said Ferland. "Of those projects, 23 out of 25 were profitable, and significant project improvements were achieved due to good execution. We believe this is an isolated issue and have performed reviews to ensure this piping design issue is not present in the other projects."

Overall Strategy

"B&W remains focused on executing our strategy," continued Ferland. "We are taking early action to ensure the coal-related business remains profitable in a challenging market while we grow our renewable energy business and diversify our portfolio through acquisition. We expect to close the SPIG acquisition early in the third quarter and continue to believe the revenue synergies for our combined businesses will provide significant upside. In addition, we plan to leverage our strong balance sheet and focus on diversification which we believe will provide increased value for our investors."

(City of Barberton, news release) Today, Babcock & Wilcox (B&W) announced a reduction in the workforce at their Barberton Location. Mayor Judge and his administration previously met with B&W's CEO and leadership team and more recently reached out to B&W just last week, yet there was no discussion related to workforce reduction. As with any workforce reduction, the impact to the local economy will be detrimental to the City budget and, most importantly, the employee and their household. As always, the City is dedicated in assisting local businesses in economic challenges. Mayor Judge's office is always open to any organization or individual seeking assistance or looking for an opportunity in our community. Mayor Judge stated, "I understand the difficulty created by any workforce reduction and my administration will reach out to B&W in order to offer assistance to affected employees. B&W continues to play an important role in our community and we look forward to continuing our relationship with them. Over the years, the City has faced similar challenges and I'm confident our continued efforts toward economic development will create positive impacts."