PG&E Corp., the holding company for the San Francisco-based combination utility, on Wednesday announced senior executive changes in anticipation of CEO Tony Earley's retirement March 1. The company is downsizing its workforce, resulting in executive and staff layoffs.
The utility portrayed the changes as aimed at creating "streamlined management structures and a series of efficiency measures." The expected results are that PG&E would be able to continue to invest in the safety of its electric and natural gas systems, which have come under fire on the gas side over the past six years.
As previously announced, current head of electric operations, Geisha Williams, will replace Earley as president and CEO, while the current head of gas operations, Nick Stavropoulos, will become COO and president of utility operations. Earley is to serve as executive chairman.
PG&E also is reducing its executive officers by eight positions, or 15%, to develop a flatter decision-making structure, a spokesperson said.
"The streamlined management structure is part of a broader plan to reduce costs in 2017,” as reflected in PG&E’s guidance issued in the 3Q2016 earnings conference call.
Most of the cost savings are to come from "reductions in spending on materials and contracts," and by eliminating 450 support services jobs from more than 12 functional areas company wide. About 800 non-employee contractor positions have been eliminated, as well as 500 budgeted but unfilled positions. The company overall has increased its workforce by about 3,000 over the past four years to support safety and operational improvements.
The net result now is that up to 390 employees could eventually be laid off as a result of the reorganization.
"None of these decisions were made lightly," Williams said. "We understand that these decisions create personal hardships, and at the same time, we recognize our responsibility to invest in the future in order to create value for our customers, communities and state."