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Corporate anxiety: streamlining at Entergy Corp. benefits ratepayers but costs hundreds their jobs.

NEWS OF ANOTHER round of staff cuts among the various Entergy Corp. operations was widely talked about internally during the fall. However, supervisors didn't hand out 30-day notices to individual employees until Jan. 8 and Jan. 11.

In all, about 400 primarily white-collar jobs were eliminated from Arkansas Power & Light Co., Louisiana Power & Light Co., Mississippi Power & Light Co. and New Orleans Public Service Inc., as well as Entergy offices in the three-state area.

Receiving the corporate pink slip was a mere formality for AP&L's public relations manager in Little Rock. Markham Howe, a 31-year employee of the company, knew his number was up before Thanksgiving.

Many offices knew how many employees were going to be lost in a given area of operations. The general mood of apprehension was shattered when names were put with the numbers.

Some reacted with utter shock and anger when confronted with the reality of no longer having a job, while others swallowed the turn of events with quiet acceptance.

The atmosphere was charged with strong emotions that alternately erupted and were buried by survivors and casualties alike in an effort to cope with personal loss and the loss of comrades.

"There's a lot of sadness for those who are leaving," Howe says. "We're in the process of implementing a new organization, and that's exciting for some people."

Nearly one out of 12 Entergy employees who worked for the company two years ago have left or were forced to leave under a variety of circumstances.

About half have either taken voluntary early retirement or left Entergy through normal attrition, which ranges between 40-50 employees per month.

The other cuts were outright dismissals or involuntary early retirements.

"It's not a pleasant feeling to have to do this," says Hiram Walters, vice president of AP&L's customer service. "But you have to approach it with the right frame of mind and do it the right way.

"Obviously, you don't go through this sort of thing without some concern on the part of employees. Other corporations are going through the same thing. Those who stay understand that. Downsizing is never easy."
Companies Cutting Staff (1990-92)
Ranked By Industry
Real Estate 91 percent
Aerospace 79 percent
Electronics 78 percent
Transportation Equipment 78 percent
Primary Metals 77 percent
Utilities 37 percent
Petroleum Products 34 percent
Health Care Products 29 percent
Health Care Services 20 percent
Pharmaceuticals 15 percent
Source: TPF&C Industry, Valhalla, N.Y.

Departure Package

Employees who are 55 years or older with at least 10 years of service are eligible for early retirement. Employees near the threshold are allowed to carry their company benefits forward until they qualify for early retirement.

Departing staffers receive 30 days pay as part of a severance package that can include more cash based on a percentage of salary and tenure.

Entergy is also picking up the bill for free counseling sessions and job placement services.

"We've tried to do this as humanely as possible," says Ed Lupberger, Entergy's chairman and chief executive officer.

The latest round of cuts brings the total staff reductions at Entergy to 1,000. There will be 500 more jobs eliminated during the next couple of years.

The ratio of staff cuts will grow to more than one out of nine before the corporate restructuring is complete.

"The mood lately has been one of anxiety and sadness to see people leaving the company, many of them having been here a long time," says AP&L spokesman Jerol Garrison. "We're beginning to understand the organization more and reduce the anxiety. The restructuring is becoming more acceptable among the employees."

Cost-cutting through layoffs is a recognizable trend among many industrial segments. Of 96 electric utilities surveyed last summer, 37 percent reported reduction-in-force programs during 1990-92. Eighteen percent expect staff cuts in 1993.

Last year, Houston Lighting & Power Co. began cutting its 11,000-employee work force by 1,570 jobs, or 14 percent, to lower costs to be more competitive and productive.

"It's always a sad time when people are let go," says Markham Howe. "It's one of the hardest things for management to do. The situation is not unique to us, either."

If the latest bout of layoffs at Entergy is any indication, the emotional drama surrounding staff cuts has grown with each successive round.

The collective anxiety of Entergy will increase to new heights in the weeks ahead before the final termination notice pares the payroll by the stated goal of 12 percent.

Some are expecting the cuts to have a lingering effect on morale and how staffers feel about the company amid some reports of survivor's remorse, a sense of guilt for still having a job after the cuts.

"Frankly, I've read a lot about the phenomenon, but I haven't seen it," says Lupberger, an Atlanta native. "But I'm not in a position to hear employees speak as freely about that. I do detect more of a concern for their future.

"That's the biggest negative we've had to deal with. If you worked for a utility, it was a given that you've got good benefits and job security.

"Now, all of a sudden job security isn't there, and benefits are being cut. It's a real adjustment for a work force that expected to be around as long as they did their job well."

There are some aspects to downsizing that carry "positive" effects. For one, the tension created by the restructuring can cause employees to be more attentive in the day-to-day aspects of their job.

A smaller, more productive work force also allows for more individual opportunity in terms of merit raises and profit sharing.

Lupberger expects the streamlining to go a long way toward further stabilizing electric rates and boosting corporate profitability. The cuts have rolled down through the corporate organizational chart, primarily in administrative areas.

"Basically, what we've tried to do is move through the organization and take out layers of management," the 56-year-old executive says. "We've tried to make sure that each supervisor has seven people reporting to them instead of two or three.

"It's more responsive and gets the job done better and is hopefully less expensive. When we started this, I said we can't raise rates any more.

"We've got customers paying premium prices for electricity and, in some cases, paying too much. We might even be able to lower rates down the line from all of this.

"We're becoming more customer driven. We know one thing they want, and that's to have the cheapest electricity possible."

Price at a Cost

But even the most ardent ratepayer must feel a tinge of remorse at seeing a monopoly terminate employees by the hundreds in an effort to stay competitive.

"Instead of looking at the people, they look at the positions they need to accomplish the goals," Markham Howe says. "From there, they select the people who will stay or go based on what the new company will look like.

"Some of the jobs might be the same, but a lot of them will be changed. Most every job in the company has to be re-evaluated. The amount of authority goes up and down. The same for resources."

The changes seem to reflect a corporation that now views itself as owning four companies, instead of four companies owned by one corporation.

The difference may seem minimal, but new perspective has shifted the focus from welfare of individual subsidiaries to the overall good of the corporation.

In the case of Entergy, the entire operation approached the brink of bankruptcy in a climate of deregulation.

"We had the papers prepared, and all we had to do was file," says Lupberger. "We owed the banks about $1.7 billion and had no way to pay. If the banks hadn't have worked with us, there's no way we could have survived. And they have gotten every penny we promised them."

Entergy's payroll will swell by another 4,800 employees if the purchase of Gulf State Utilities Co. in Beaumont, Texas, goes through as planned.

Stockholders at both companies have approved the deal, but the $2.3 billion stock swap/cash transaction is still pending approval by state and federal regulatory agencies.

"Maybe, we'll be able to start off 1994 as one company," says Cyril Guerrera, spokesman for Entergy in New Orleans. "GSU will come in and mirror the four operating companies. But we haven't looked internally at GSU on an office-by-office basis."

GSU serves 579,000 customers in a 28,000-square-mile area of south Louisiana and southeast Texas. The size of its customer base could make it the second largest-operating unit of Entergy.

Only Louisiana Power & Light, which provides electric service to 590,000 customers in 46 of the state's 64 parishes, is larger in a direct comparison.

However, if regulators approve the deal, GSU might be separated along state boundaries. The Texas operations could become a fifth operating unit while GSU's Louisiana holdings are folded into LP&L.

Such a move would be in keeping with Entergy's consolidation for efficiency's sake. But no one is saying for sure that GSU won't remain intact.

NOPSI is all but imploded into LP&L and would be absorbed entirely if it weren't regulated by the city of New Orleans.

"If we could get the city's permission, we'd do it tomorrow," says Lupberger. "On paper, they look like two companies, but they function as one. NOPSI exists primarily as an accounting procedure."

Career Counseling

Ron Cameron, partner with Career Transition Dynamics in Metairie, La., is helping outplaced Entergy workers make the career change.

"Losing a job is one of the most stressful things to go through in life, especially at a company like Entergy where most of the employees have been around for a while and in some cases are second- or even third-generation employees," Cameron says. "Most have done interviews 15-20 years ago, and they're scared to death. Hopefully, after two days with us, they walk out feeling better about themselves and the future."

Entergy has set up career centers in New Orleans, Jackson, Miss., and Little Rock as an aid for outplaced workers. The centers help unemployed workers with polished resumes, coordinated job hunts, free phone calls and message service.

Cameron's firm aids workers in assessing their talents, offers marketing strategies for finding a new job and even preps them in mock interviews.

"It's a lot easier to find a job through the center than from the house," Cameron says. "They're good solid people, but it just comes down to a numbers situation."

Transition counseling may advise a worker to go back to school. Some are even recalled back to Entergy when a slot opens through attrition.

And there are more permanent cuts in the offing before operations at Entergy settle down into a new routine.

"The next 400-500 people |to be cut~ will be a slower process," says Lupberger. "We'd like to say everything's back to normal, but it will never be back to the way it used to be."

New Batch of Business Cards

The winds of corporate change at New Orleans-based Entergy Corp., the parent company of Arkansas Power & Light Co., began with a gust in 1991.

Jerry Maulden, then AP&L chairman and chief executive officer, was named president of Entergy's new Little Rock-based Transmission Distribution Customer Service group. He became chairman and CEO of all four operating companies: AP&L, Louisiana Power & Light Co., Mississippi Power & Light Co. and New Orleans Public Service Inc.

The move was a stage-setter to cutting the company's 12,500-member work force in three states by 12 percent.

In the most recent round of restructuring, 400 employees lost their jobs and operations were streamlined. For example, marketing responsibilities that once lay with AP&L, LP&L, MP&L and NOPSI were consolidated under Entergy's TDCS group.

Besides the loss of familiar faces, new titles abounded for Entergy employees who remained after the cuts.

Here is a sampling of new business cards:

Mike Bemis was president and chief operating officer of LP&L and NOPSI. He returns to Little Rock, where he was once AP&L executive vice president of operations, as executive vice president of customer service for TDCS. Bemis reports to Maulden.

Charles Kelly was vice president of communications for AP&L. Kelly is now vice president of corporate communications and public relations for Entergy Corp. He has moved his office from Little Rock to New Orleans.

Kay Arnold was vice president of communications for AP&L. Arnold is now director of communications for AP&L. She reports to Kelly.

Dave Eldridge was AP&L's vice president of marketing and economic development. Eldridge is now director of economic development, reporting to C.J. Brunet, marketing senior vice president for the Entergy system.

Gerald Jones was Maulden's executive assistant at TDCS group. Jones is now transportation manager for Entergy at TDCS.

Jack King was senior vice president of Entergy and system executive for operations in New Orleans. King is now in Little Rock as president and chief operating officer of Entergy Enterprises, which manages Entergy's unregulated business operations such as international deals in Argentina and Indonesia.

Chris Longinotti was manager for environmental services for AP&L. Longinotti is now environmental manager for Entergy's TDCS group.

Larry Plumlee was director of technical support for AP&L. Plumlee is now manager of meter and transformer services for Entergy.

Mike Russ was vice president of marketing for MP&L. Russ, a former mayor of Maumelle, is now vice president of Entergy services.

Hiram Walters was senior vice president of customer service in the Entergy TDCS group. He is now AP&L vice president of customer service, reporting to Bemis.

John Marshall was AP&L vice president of customer service. He is now vice president of customer service support for the Entergy system, reporting to Bemis.
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Title Annotation:includes related article on new officers of the firm
Author:Waldon, George
Publication:Arkansas Business
Date:Jan 25, 1993
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