The Tennessee Valley Authority is moving to outsource about one of every five jobs in its information technology office, a move that should help pare costs and improve performance but cost up to 120 jobs, officials said Tuesday.
TVA cut a dozen IT jobs last fall as it began making changes and TVA managers met with IT staffers Tuesday to advise them of another 108 jobs that are scheduled to be cut in late spring as TVA moves to use more contractors for software development and other infrastructure services in the IT division. Most of the threatened employees work at TVA's computer center in the Chattanooga Office Complex and the job losses could trim more than $6 million in the local payroll.
"Being a 19-year TVA employee starting in the IT division, this was a tough decision," said Jeremy Fisher, vice president and chief information officer at TVA since February 2019. "But I don't have the luxury of not doing the right thing for TVA and if we can make this change to add better value to TVA and support our direction and mission, that's what we need to do."
Fisher said TVA, which has done virtually all of its software writing and development in-house for nearly four decades, began a study 18 months ago to figure out if there is better way to develop software and technology for TVA, similar to what most utilities have already done shifting some or most of that work to outside contractors.
"When we think about TVA's mindset of continuous improvement, it was time to reflect the mirror on IT and see how we could be better," Fisher said. "The demand for technology has never been higher, but there is a natural constraint on that if you are trying to do everything in-house and on your own. We're looking to leverage the market with people who have the expertise to help us deliver more technology to help move TVA along that path of continuous improvement."
Fisher said most utilities and major corporations whose core business isn't technology are generally not developing their own software anymore but are relying more upon the market for those services.
"We bench marked ourselves with others in our industry and, in studying this, we found that it would also be the best decision for TVA to leverage the market," he said.
TVA corporate communications director Buddy Eller said TVA involved it employees in such studies looking at options "to be very transparent with the IT team throughout this process."
"It's been a very collaborative and open process," Fisher said.
TVA is turning to a number of IT contractors for different services, including the global IT consulting and technology services company Capgemini, which is based in Paris.
Among the nearly 500 employees in TVA's information technology division, more than 20% are expected to receive formal notices in the spring quarter starting in April that their jobs will outplaced. Such workers will get 60 days notice of any job termination, but a week's pay for each year of employment they have with TVA if they don't find other work at TVA.
TVA will provide outplacement assistance and in the current market with high demand for IT workers, most of the displaced workers are likely to find employment elsewhere in the market, if they choose, Fisher said.
TVA is not cutting its cybersecurity staff and the utility is continuing to move forward with its upgraded technology for its Grid 2023 network with a new $300 million operations center in Georgetown.
Gay Henson, president of the Engineering Association, said 96 of the displaced IT workers at TVA are represented by the EA union and she said she has "huge concerns" about the change and the job losses. Henson said she will meet with TVA managers Wednesday to discuss the upcoming changes.
"We want to keep this work here in the Valley, but we need to talk with TVA and find out more about the changes," she said.
From its employment peak of more than 52,000 employees in 1981, TVA has cut its own workforce to about 10,000 employees today while contracting out most of its construction and temporary maintenance projects. Under former TVA President Bill Johnson from 2013 to 2019, TVA cuts its annual operating and maintenance costs by $800 million to move TVA from the bottom 25% of U.S. utilities for O&M expenses into the top quartile of all utilities in what it spends on ongoing operating costs.
"We're not done yet," TVA's current president, Jeff Lyash, told Chattanooga's EPB board last week. "We want to be in the top 10% of all utilities in our performance and we won't stop until we are the very best."
Contact Dave Flessner at email@example.com or at 757-6340.