PPL Corp. to eliminate 7 percent of work force

HARRISBURG, Pa. – Power company PPL Corp. will eliminate nearly 600 jobs, or 7 percent of its domestic work force, as part of a companywide overhaul designed to improve productivity, its top executive said Wednesday.

The initiative is expected to reduce the electric company’s operation and maintenance costs by about $50 million a year, said William F. Hecht, PPL’s chairman, president and chief executive officer.

Employees were being told Wednesday about the planned elimination of 285 management positions and 313 union-represented jobs. Linemen, electricians and other employees directly involved in providing electrical service are not affected by the reductions, Hecht said.

PPL began operating in Maine when it purchased Bangor Hydro-Electric Co.’s generators in 1999. The Pennsylvania company has 100 percent ownership of seven generators, 50 percent ownership of another plant, and employs about 20 people in Maine.

“There are no jobs from Maine affected,” said PPL spokesman Dan McCarthy regarding the planned layoffs.

A program to boost productivity, similar to one that PPL previously implemented for its Latin American operations, had been announced earlier this year.

“While a reduction of the work force is always a difficult decision to make, we do anticipate that a large number of the 598 employees affected by the change will take advantage of a special retirement provision,” Hecht said. Other employees will be eligible for company-paid assistance in finding other jobs.

Costs associated with the employee separations, estimated at $75 million, or 29 cents per share, are expected to result in a charge against the company’s second-quarter earnings, and most of the costs will be paid as enhanced pension benefits, Hecht said.

Allentown-based PPL plans to announce its second-quarter earnings July 24.

The job-cutting initiative follows the company’s January announcement that it was reducing planned capital spending on new power plants by $1.3 billion.

PPL has increased its U.S. power-generating capacity by 25 percent in recent years. It also has expanded its electricity-delivering business, which currently serves customers in Pennsylvania, the United Kingdom and Latin America.