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October 2nd, 2013:

Gas Utility to Cut 200 Jobs and Outsource to India

American Energy Coalition - October 2nd, 2013

Northeast Utilities, operator of New England’s largest utility system serving more than 3.6 million electric and natural gas customers, will cut its information technology workforce in half and ship the work to two companies in India, according to an article in the new Haven Register.

Some of the IT work will be shifted to Infosys and TCS Consulting, which are based in India, said David McHale, NU’s chief administrative officer. As a result, 200 of the 400 information technology jobs in the company will be eliminated. The IT employees are located in Connecticut, Massachusetts and New Hampshire.

The announcement comes as Northeast Utilities and other Connecticut gas utilities are looking to expand gas service in Connecticut with current ratepayers being asked to share the costs for system expansion through higher natural gas rates.

Connecticut House of Representatives Majority Leader Joe Aresimowicz said he was “disappointed and quite frankly disgusted” by the NU’s decision. “NU is slashing good-paying Connecticut jobs,” he said in a statement. “I can see it now; this will probably result in top executives receiving bonuses while middle class families suffer. We cannot accept this as business as usual.”

Connecticut Attorney General George Jepsen and Consumer Counsel Elin Swanson Katz have asked the state Public Utilities Regulatory Authority to investigate whether the company’s plans violate a 2012 agreement in which state officials agreed not to oppose NU’s merger with Massachusetts-based NStar. 

Jepsen and Katz said if PURA chooses to investigate the NU plan, it should include a review of the effect that outsourcing of information technology jobs could have on the company’s major storm outage readiness, response and communication.

David Cadden, a professor at Quinnipiac University’s School of Business, called NU’s plan “one more sad example of the ghost of ‘re-engineering’ as practiced by too many American managers.”

“In its original form, ‘re-engineering’ was meant to be a mechanism to examine business processes and eliminate that which didn’t contribute to customer value,” Cadden said. “Unfortunately, in practice, it became a rationalization for massive layoffs and outsourcing. Outsourcing, given today’s technology, may save costs, but it ignores long-term issues and sends a message to current employees that you are valuable until we find a lower-cost alternative to you.”

Aresimowicz and other state lawmakers held a press conference last week to express concern that outsourcing with foreign companies might put NU’s energy distribution network at risk for possible security breaches.

 To read the New Haven Register article, click here.

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