The Cobb EMC Board of Directors voted unanimously Tuesday to reduce its staff and linemen by between 55 and 110 of its 550 employees through a company-wide offer of voluntary separation packages.
CEO and President Chip Nelson made the announcement to employees Wednesday and Thursday.
“It wasn’t underhanded,” said a Cobb EMC employee about the announcement, who asked not to be identified. “It was OK and they need to because some of (our staff) needs to go. That way, other people that are with this company have the opportunity to move up.”
She commended Nelson on stepping up as the new CEO and said she believes he’s doing what’s best for the company with this move.
“He was pretty up front that this is what they’re offering and it’s decent and that you’ll get your package when you leave (Thursday) and if it’s suitable, then go for it,” she said. “I think it’s a good thing for these young guys who have been waiting 10 or 15 years to move up. If you’re of age to retire, you should go ahead and enjoy the rest of your life.”
Ed Crowell, chairman of the Cobb EMC Board of Directors, said his board came to a consensus after multiple month long studies on various issues from the company’s staffing levels to the information technology system.
“We took a look at everything,” he said Thursday, adding that he expects a range of reactions from employees about the news.
“There will be some people that this will be a very nice bridge to retirement and there will be others where it’s not their desired outcome,” he said.
Crowell was asked if this move had anything to do with the class-action lawsuit and debacle surrounding former CEO Dwight Brown, who is accused of withholding millions of dollars in credits from the EMC’s customers.
“In regards to the size of the staff, it does,” he said. “Some of it was due to other energy businesses that were explored that are just not going to happen.
“Our responsibility is to employ who we need to employ, but not more than that. We just don’t have the right to spend more money that we need to.”
Telling the staff
In Nelson’s announcement to employees, he said the reduction in staff was because of two things: Aligning the workforce with its business needs, and meeting members’ needs now and in the future.
“As we’ve refocused on our core business as an energy provider in our service districts, we’ve identified opportunities to operate more efficiently and effectively where both our technology systems and staffing levels are concerned,” he said.
The multi-month review Crowell mentioned involved Cobb EMC looking at staff loads in other EMCs that matched Cobb EMC in size.
Nelson said that study showed Cobb EMC was significantly overstaffed in some areas, including information technology systems.
“We know we have some very long-tenured employees who are approaching retirement and who will probably welcome the voluntary separation package they’re being offered,” he said. “In turn, their retirements should create some opportunity and upward mobility for employees who are coming along behind them.”
Employees will have 60 days to consider the package before deciding whether to accept the offer. It’s open to any employee and the cost of the package depends on each employee’s tenure and current pay grade.
The company is reserving the right to determine employee departure dates in order to make sure reductions do not compromise operations.
“We’re asking employees to work with us on their departure dates so that we can ensure an orderly transition of organizational knowledge and particular skill sets,” Nelson said.
The company will lay off employees if it is still overstaffed after the voluntary phase is over.
“I want to be clear that while we have an obligation to our members to operate as cost-effectively as possible, this initiative is driven first and foremost by operational considerations,” Nelson said.
“We will save money in the process and that’s important. But more important is realigning our staffing, systems and operations to meet current and future member needs, and we will take the time we need to do this correctly.”
Cobb EMC spokesman Mark Justice said it’s too early to determine the amount of savings to be captured by the voluntary buyouts.
“Our cost savings will remain a moving target until we know how many people are taking the separation package,” he said.
The company hasn’t decided what it will do if the buyouts are not accepted by enough employees.
“We are confident that we will meet our projected target, but we will have to see what happens,” Justice said.
About Cobb EMC
Cobb EMC is a nonprofit co-op that was formed in 1938 and started as an electric utility with 489 residential members and 14 commercial accounts.
Serving more than 200,000 meters representing more than 177,000 residential and commercial customers, Cobb EMC is one of the largest of Georgia’s 42 EMCs, and is among the largest of the nation’s approximately 900 EMCs.
The Cobb EMC distribution system consists of approximately 10,000 miles of line in Cobb, Bartow, Cherokee, Fulton and Paulding counties in the metro Atlanta area and Randolph, Calhoun, Quitman and Clay counties in southwest Georgia.