DWP announces staff reductions and cost- containment measures.

LOS ANGELES--(BUSINESS WIRE)--Nov. 1, 1994--Los Angeles Department of Water and Power General Manager William R. McCarley Tuesday announced a staffing reduction of 1,000 DWP employees by July 1, and other cost-containment measures which will result in a $160-million savings between now and the end of fiscal 1995-96.

McCarley said the staff reduction accounts for $60 million of the savings. It will be achieved through attrition, early separation incentives or severance packages, and the outplacing of employees.

``However, to the extent staff reductions of 1,000 are not achieved through these means by July 1995, layoffs will be required,'' he said. ``Within the next 30 days, a final list of positions to be eliminated will be completed. At that time, I will ask for layoff lists which take into consideration seniority to assess the impacts should layoffs prove necessary.''

Other cost-containment measures, totaling $100 million to be achieved between now and the end of fiscal 1995-96, consist of suspension of demand-side management programs and research and development activities, and major reductions in inventories, equipment purchases and contracting.

Also included is termination of DWP's membership in the Electronic Power Research Institute, which manages technology, research and development programs for the electric utility industry.

Noteworthy progress in cost containment has been made to date, McCarley said. As a result of a stringent hiring freeze, staff has been reduced by several hundred positions since January. In addition, cost-containment strategies announced in March 1994 to reduce controllable expenditures in overtime, contracts and equipment and material purchases have resulted in a savings of approximately $30 million.

The Barrington-Wellesley Group's audit report to the City Council recommended that DWP staff, including contract employees, be reduced by 2,300 to 2,900 positions over a five-year period in the categories of officials and administrators, engineers, technicians, administrative support, skilled craft and service maintenance, and exempt construction workers.

McCarley said failure to take timely action in staff and cost reductions will only serve to jeopardize the Power System's ability to compete effectively as the electric utility industry moves toward deregulation, inhibit DWP's ability to maintain reasonable rates for its customers, and require more drastic actions at a later date.

Staff reductions and cost-containment measures are being implemented to respond to audit recommendations and to ready the DWP for impending competition resulting from the California Public Utilities Commission's desire to deregulate the electric industry at the retail level.

CONTACT: Department of Water and Power, Los Angeles 

Sandra Tanaka, 213/367-1289