Los Angeles DWP Plans to Cut 2,000 Jobs

Stranded costs are forcing Los Angeles Department of Water and Power (LADWP) officials to restructure the utility in order to be competitive in the approaching era of deregulation.

On Oct. 29, David Freeman, the LADWP general manager, announced a cost-saving plan that includes the elimination of more than 2,000 positions by Feb. 1, 1998. The plan also calls for the restructuring of the DWP's electrical business unit into three operating companies overseeing electrical generation, transmission and distribution.

"DWP cannot survive with a labor force of administrators, managers, engineers and consultants that far exceeds what is necessary to operate competitively and effectively," said Freeman. "While this is a difficult message, layoffs are a critical component of the plan to make DWP competitive," he continued.

The DWP is taking these measures to elminate some of its $4 billion in debt incurred, for the most part, from constructing generating plants in the 1980s.

Beyond staffing reductions, the plan includes proposals to sell unnecessary assets, such as surplus real estate and 600 sedans from its vehicle fleet, and use standardized project designs and off-the-shelf technology to achieve savings that can be used to reduce the debt burden.

The plan, said Freeman, will make it possible for the DWP to ensure no rate increases and to allow for the possibility of reducing residential rates on electricity.