Northeast Utilities has not confirmed publicly that it will be outsourcing 300 to 400 information technology jobs, but that’s what lawmakers like Majority Leader Joe Aresimowicz are hearing from their constituents.
After meeting with the biggest utility company in Connecticut, Aresimowicz said they still won’t say whether they are outsourcing these jobs.
“To me that’s unacceptable,” Aresimowicz said. “. . .The public has a right to know whether their utility company is slashing staff.”
His constituents are telling him that “it’s pretty far down the tracks and outsourcing is going to happen, but no time frame.”
There’s also no information about which functions in the IT department would be outsourced. Some companies outsource their computer development jobs to foreign countries where labor is cheaper.
Northeast Utilities is headquartered in Aresimowicz’s district in Berlin.
Aresimowicz recalled that this is the same utility as the parent company of Connecticut Light & Power that “had a less-than-stellar track record in storm response.”
Since the 2011 storms in which millions of residents lost electricity for extended periods, the state and its regulators have kept a watchful eye on Northeast Utilities’ storm response and its 2012 merger with Boston-based NSTAR.
Rep. Lonnie Reed, who chairs the Energy and Technology Committee, said the state was given assurances that any layoffs based on the merger would be done through attrition or retirement.
“We need answers and we need them now,” Reed said.
Notifying the state of layoffs is a requirement of the merger agreement. Reed said notice has to be given 30 days in advance of the layoffs.
“As we have stated, as a result of our merger we are in the process of evaluating opportunities to streamline and improve IT functions so that we can deliver a high level of service to our customers at the least cost,” Tricia Modifica, a spokeswoman for Northeast Utilities, said. “While we work to accomplish this, we will share any decisions that we make with our regulators and employees when the time comes.”
Aresimonwicz said from the outside it looks like the utility was being “very vague and very secretive” hoping that this would happen without any sort of transparency.
According to Reed, the lack of transparency regarding layoffs has happened before with the utility. There were rumors pink slips were going around and it caused a great deal of confusion, she said.
Reed is referring to a previous incident in December 2012 when about 319 employees, some involuntarily, left Northeast Utilities during the merger process. The layoffs were not reported to the Attorney General or the Consumer Counsel.
“There’s a process and they did not adhere to the process that they promised to, and that undermines their credibility,” Reed said Thursday. “We really need to hear from them before. Get out in front of these things, not after.”
The merger settlement agreement states that “Reductions in the Connecticut employee work force in connection with the achievement of merger synergies shall be made on a fair and equitable basis and will not be disproportionate to other jurisdictions in which the merged entity conducts operations, with respect to the number of reductions or with respect to the relative number of high-compensation versus low-compensation positions.”
Reed said as part of the merger agreement they promised to be upfront about layoffs and “they promised from the outset not to reduce their workforce through layoffs.” She said other means such as attrition were supposed to be applied before layoffs are considered.
It’s plausible the utility hasn’t notified the state of any layoffs because the process is outside the 30 day window, but Reed said if that’s the case it’s “ridiculous.”
“There’s the letter of the agreement and the spirit of the agreement,” Reed said.
Outsourcing all the IT functions may not make sense for the utility and lawmakers hoped that was not the case. Lawmakers said the security of the electrical grid could be put at risk if some of those jobs are outsourced to foreign countries. Aresimowicz said there are growing concerns about cyber attacks on computers that run the electrical grid, which Connecticut learned is fragile.
“Are we willing to put the safety and security of our grid, of our electricity system, in the hands of another country?” Aresimowicz said. “I’m not sure.”