ELKO, Nev.—Newmont Mining Corp. has announced the layoffs of 56 employees in Nevada, citing lower gold prices and rising costs.
Newmont spokeswoman Mary Korpi said the move was made after a thorough review of how to keep the Denver-based company competitive in the current business climate.
The company preferred to reduce its workforce through attrition, she said, but the business challenges did not allow it the time or flexibility to solely rely on attrition for reducing labor costs. Newmont’s attrition typically averages 10 percent annually.
Affected employees will receive severance packages and access to outplacement services to help them find other jobs.
“The changes are difficult but necessary for us to run our business more efficiently and more effectively amid the growing challenges of the present economic environment,” Korpi said in a statement.
In June, Newmont hinted it could lay off some Nevada employees after announcing plans to cut its workforce in Colorado by 33 percent.
Also in June, Toronto-based Barrick Gold Corp. slashed about 40 positions in Nevada, citing the same factors of falling gold prices and rising costs.
Gold has rebounded to $1,339 since sinking to $1,212, its lowest level in almost three years, on June 27.
Gold’s resurgence since then follows a rough ride this year. Gold slumped 4.8 percent in the first three months of 2013 as the outlook for the economy improved while inflation remained subdued.
Gold plunged by $140 an ounce, or nine percent, on April 15 as investors unloaded their holdings. That was the biggest one-day decline in more than 30 years.
With the price of gold down some 20 percent this year, mining companies are taking a close look at their business plans.
“Newmont’s corporate office and all operating regions around the world, including Nevada, have been carefully evaluating their respective operating models to determine how to keep our company competitive in an increasingly challenging marketplace,” Korpi said.
