PG&E cutting hundreds of jobs in restructuring

PG&E will slash hundreds of jobs in a restructuring that the company believes will enable it to operate more efficiently without reducing safety, the embattled utility said Wednesday.

About 450 positions in “support services” will be eliminated as part of the cutbacks. PG&E has found jobs for 60 of those 450, which means the company will dismiss a net total of 390 workers, the utility said.

“We are reducing support services costs in order to continue to invest in important safety initiatives and in modernizing our system,” said Geisha Williams, who is the president of electric with Pacific Gas and Electric, the utility arm of PG&E. Williams has been tapped to become chief executive officer of PG&E, a role she will assume in March.

The cutbacks in support services workers amount to 1.9 percent of PG&E’s staff of 23,500.

PG&E began notifying affected workers on Wednesday, a process that will extend into next week.

In addition to the support services cutbacks, PG&E said it will trim 15 percent of its executive staff, which amounts to eight positions. The goal of these changes is a flatter and more nimble management structure, the utility said.

Among the changes in management: Nick Stavropoulos, currently president of gas operations with Pacific Gas and Electric, will become president and chief operating officer of PG&E.

The Williams and Stavropolous appointments both are effective March 1.

Current CEO Anthony Earley, who came on board at PG&E in 2011, will remain with the company as executive chairman.

San Francisco-based PG&E is attempting to cope with the years-long aftermath of a fatal explosion that killed eight and wrecked a San Bruno neighborhood. The company last August was convicted on six criminal counts for illegal actions before and after the lethal blast. It faces sentencing this month on the federal convictions.

“The employees who are affected are not front-line people who provide services to customers on a day-to-day basis,” said Brian Hertzog, a PG&E spokesman. “They are in corporate support services. The bulk of them work in the San Francisco headquarters offices.”

In addition to the cuts in regular staff positions, PG&E dismissed 800 contractors who are not employees, and it won’t fill 500 open, non-critical positions.

“The problem is, we don’t know enough about what the jobs involved are to know what the impact is going to be,” said Mindy Spatt, a spokeswoman for The Utility Reform Network, a consumer group.
The company is investing more in safety and services. It hopes the savings from laying off employees and cutting back contractors will ease the need for PG&E to seek rate increases to finance the upgrades.

The cutbacks to regular staff should save about $300 million a year, PG&E estimated.

Because of the byzantine nature of state Public Utilities Commission decisions on general rates cases, a process that comes around every three years, it’s possible that ratepayers won’t enjoy any benefits from reduced expenses any time soon.

“The timing of these layoffs ensures that customers won’t see the savings in the near future,” Spatt said.

A general rate proceeding is now underway before the state PUC. That case will determine future gas and electricity bills for PG&E ratepayers.

“Our customers want electric and gas services that are, above all, safe, but also affordable, reliable and clean,” Stavropoulos said. “Our goal is to ensure that every dollar we spend is helping to deliver against those goals.