BETHESDA, Md. - USEC Inc. (NYSE:USU) announced today that it will reduce its production workforce by 850 beginning July 2000. This 20 percent employee reduction, a critical step in reducing the Company’s cost structure in response to declining market conditions, is expected to result in approximately $39 million in annual production cost savings. The Company will also reduce its headquarters costs.

A voluntary reduction in force will be offered. If there are not enough volunteers, an involuntary program will be initiated. The reductions will be divided approximately equally between the Company’s two plants in Paducah, Kentucky, and Portsmouth, Ohio, and will be conducted in full compliance with the privatization agreement with the U. S. Treasury Department.

"We regret having to take this action and the impact it will have on our employees," said USEC Executive Vice President Jim Miller. "It is well known that increased global oversupply of enrichment and strong competition have resulted in increasing pressure on us to further reduce our labor costs. We continue to strongly support government activities to carry out worker transition programs and to create new jobs. We will continue to make every effort to work closely with our unions, state and local officials, the U.S. Department of Energy and Congress to seek timely implementation of these transition programs."

In guidance offered by USEC today about its fiscal year 2001 outlook, USEC is projecting substantially lower earnings next year compared to the current fiscal year. This outlook results from continuing low market prices for SWU and uranium, lower anticipated USEC sales volumes in fiscal 2001, and higher unit production costs that stem from the substantial volume of Russian enriched uranium that the Company must purchase at above-market prices and the resulting lower production volumes at the enrichment plants. Continuing U.S. government restrictions further limit the Company from taking decisive cost-cutting actions required by current unfavorable market conditions.

USEC Inc. is the world’s leading supplier of enriched uranium fuel for commercial nuclear power plants. A global energy company, USEC has its headquarters in Bethesda, Maryland, and operates production plants in Kentucky and Ohio.

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