Progress and Duke will offer buyouts

Merger will bring layoffs; email notices are sent to 11,000 Progress and 17,000 Duke employees.

Staff WriterJune 30, 2011 

Progress Energy and Duke Energy notified workers Wednesday that both companies will offer voluntary buyouts this fall as the state's largest electric utilities prepare for their planned merger.

The corporations are nudging workers to depart on their own, a strategy designed to limit the pain of the layoffs when they combine operations and seek to slash costs.

It's unclear how many jobs are on the line, but previous utility mergers suggest the number could easily be hundreds or more. The two companies plan to provide more details this fall about who will be eligible to take the buyouts, the financial terms and how much time they have to decide.

Progress and Duke, which announced their union in January, sent email notices Wednesday - Progress to 11,000 employees in North Carolina, South Carolina and Florida, Duke to 17,000 workers in the North Carolina, South Carolina and Midwest.

"We're trying to give employees as much time to think through these things, to talk things over with their spouses," Progress spokesman Mike Hughes said. "It's truly an effort to have fewer people who are outplaced at the end of this process. We have committed to minimizing layoffs as the organizations are integrated."

But the buyouts set into motion what is likely to be a significant economic shakeup in the Triangle.

Progress and Duke executives have said that in this merger, neither company will be spared from job cuts. They said the cuts could come in the form of attrition, retirements and job cuts.

Progress workers, including 1,800 people in downtown Raleigh, could bear the brunt of reductions, if only because the combined company's headquarters will be in Charlotte.

Progress workers who are offered jobs with the combined Duke could be forced to relocate to stay with the company, whereas it's much less likely that Duke workers would be asked to move to Raleigh.

Positions to be affected include such corporate office functions as human resources, legal, finance, communications and others that will become unnecessary when the two companies combine operations in Charlotte.

"The intent would be to focus eligibility largely on employees in positions that are redundant," Hughes said.

Progress officials have said that the company will keep a significant presence in downtown Raleigh. Employees in many divisions - such as line workers and power plant operators - will not be affected by the buyouts.

The Progress-Duke union would form the nation's largest electric utility with 7.1 million customers in six states. The deal still requires regulatory approval from state and federal agencies. This week, the companies announced a tentative agreement to win approval inKentucky, a deal that includes a two-year rate freeze.

A decade ago, the merger between Carolina Power & Light and Florida Progress that created Progress Energy eliminated about 1,300 positions, mostly in Florida. Duke's 2006 acquisition of Cinergy in the Midwest led to more than 1,500 positions cut.

The total number to be affected this time will be partly determined by how many workers can be encouraged to begin job hunting before the deal is done. During the first three months of this year, 65 Progress workers left, and most positions aren't being refilled.

The announcement Wednesday generally raises the possibility of voluntarily resigning from Duke or Progress but doesn't provide any details that would allow an employee to make an informed decision.

Duke spokesman Greg Efthimiou characterized the notice as a courtesy to employees.

But it could also prompt workers to look for other jobs and quit before the buyouts are offered, sparing the company from paying severance.

For Progress, this will be a second major voluntary buyout program in recent years, on the heels of eliminating nearly 1,450 senior workers in a buyout five years ago. So many took the offer last round that Progress had to hire 1,000 employees to fill essential positions.

In this round, however, the buyout program will be open to workers of all ages. Duke and Progress employees will be offered the same terms for eligibility and severance.

The companies join other large employers that are trying to trim their workforces. Cisco Systems, which employs 4,900 people in Research Triangle Park, is in the midst of a companywide buyout program that could eliminate several hundred positions from the computer networking company's local operations. or 919-829-8932

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