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
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
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.''