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Posted on Fri, Sep. 13, 2002 story:PUB_DESC
FirstEnergy to cut 350 jobs
Most to come from Akron, Reading, Pa. 39 positions axed Thursday, 14 locally

Beacon Journal business writer

FirstEnergy Corp. plans to eliminate 350 jobs next year and in 2004, with the bulk coming from Akron and Reading, Pa., offices, as part of a program to save up to $135 million annually in salaries and other costs by 2006.

The company said 39 jobs were ended Thursday as part of the program, with 14 in Akron and 10 in Cleveland.

Most of the 350 job cuts will be in so-called support services, such as information technology, accounting and human resources, and will take place largely in 2003 with the rest the following year, spokesman Ralph DiNicola said.

The company also has 200 open positions that will not be filled, he said. FirstEnergy has a total of 14,600 employees, with 3,137 in the Akron area, he said.

FirstEnergy expects most of the job reductions will be accomplished through attrition and retirement, plus the end of project work assignments, DiNicola said. The job eliminations this year will have a negligible impact on earnings, and the upcoming reductions probably won't have significant costs because the company isn't offering special severance packages, DiNicola said.

Employees who lose their jobs will be able to bid on other positions in the company or be able to fill open jobs created through retirements, he said.

A study started in March identified the areas where the company will make the reductions, DiNicola said. The company has been making staffing cutbacks following its acquisition of New Jersey-based GPU Inc. last year.

DiNicola said the cuts are not a response to FirstEnergy's problems with its damaged Davis-Besse nuclear power plant, which could cost the company $300 million in repairs and related costs. The cuts also are unrelated to the termination of an agreement this summer to sell four coal-fired plants.

The positions identified for elimination don't fit into the electric utility industry's less-regulated environment, DiNicola said.

The people who will lose their jobs are good, hard-working people, DiNicola said.

``The fact is, the industry has changed,'' he said. ```We've gone through two mergers that involved staffing studies.''

The anticipated $135 million in annual savings will be used to reduce debt and for reinvestment in the business, DiNicola said.

The company wants to significantly reduce its debt by the end of 2005.

The cutbacks are not unexpected because of the GPU merger and FirstEnergy's program to reduce debt, said Warwick Busfield, an analyst with Fahnestock & Co. in New York who follows FirstEnergy and other utilities.

``It takes a while to digest your average acquisition,'' Busfield said. ``They don't do this all of a sudden.''

Most utilities are looking for ways to save money, he said. ``It's a normal part of business.''


Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com
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