Progress Energy to make big job cuts in Raleigh

Staff WriterSeptember 2, 2011 

The totality of Progress Energy's imminent downsizing fully sank in Thursday when the company said it could erase as much as half of its workforce in downtown Raleigh as part of its planned merger with Duke Energy.

The power company notified its workers to expect corporate operations downtown to shrink to between 1,000 and 1,300 employees. Today about 2,000 people work in the company's two high-rise offices.

Nearly every other downtown Progress employee will be affected. The numbers provided Thursday clear up any illusions the workers may have harbored about the odds of keeping their jobs.

But others greeted the news with a sense of relief that the cuts were not deeper.

Under the merger terms announced in January, Progress gave assurances it would keep a substantial downtown Raleigh presence, but for eight months the company had not put a number on that promise.

"To have that substantial presence is good," said Harvey Schmitt, the CEO of the Greater Raleigh Chamber of Commerce. "I had hoped for one full building of people and we will have one full building of people."

The loss of hundreds of well-paid workers also was cushioned by last week's announcement that software developer Red Hat plans to move 600 employees into a downtown office tower that Progress Energy will abandon.

The corporate merger, which is expected to be completed by the end of this year, will create the country's biggest electric utility, with 7.1 million customers in six states. The combined company will be headquartered in Charlotte and headed by Bill Johnson, currently CEO of Progress.

The electric utility will keep a number of key positions here, including a North Carolina utility president and senior-level executives to oversee a variety of operations.

The Progress job cuts will come through voluntary buyouts, from workers finding other jobs or retiring, and from layoffs. Some losses here will come as a result of Raleigh employees agreeing to move to Charlotte as a condition of keeping their jobs.

In less than two months, Progress workers who fill the company's two downtown high-rises will find out if their positions are slated for elimination. In mid-October, officials will identify positions that will remain in Raleigh and offer buyout packages to remaining employees.

Legal, finance, accounting and other corporate headquarters functions are among the positions that will be consolidated in Charlotte when Progress combines with Duke Energy. Technicians, linemen, power plant operators and other such jobs will be spared.

"This is strictly about downtown Raleigh and corporate support positions that are located here," said Progress spokesman Mike Hughes.

Meanwhile, Red Hat is expected to add to its initial downtown staff of 600. The company has said it would create 540 high-paying jobs over the next nine years.

"This is the best possible outcome for downtown," said David Diaz, head of the Downtown Raleigh Alliance, a group that promotes downtown revitalization. "Having a utility downtown and a software development company next to it is the envy of people in other communities who have my kind of job."

But in the short term, downtown will have several hundred fewer employees, because Progress is cutting more positions than Red Hat's total current local workforce. That's not expected to put downtown restaurants out of business, but the difference will not go unnoticed.

"Everybody they patronize will feel something - how can you not feel it?" said Debbie Holt, co-owner of Clyde Cooper's Barbeque, across the street from the building that Progress is vacating. "When you know people by their first names, and you know about their children going to college, you're going to miss them. All of a sudden you're not going to see them anymore."

john.murawski@newsobserver.com or 919-829-8932

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service