THE JAMAICA Public Service Co. Ltd. (JPSCo), expects to fork out $850 million in redundancy payments as it cuts just under 400 people from its staff by December this year.
A total of 355 of the nearly 2,000 JPSCo employees have opted for voluntary redundancy or early retirement and the company has decided to accommodate all of them. Among the numbers are six persons at the director level or senior director level.
The Gleaner has learnt that the light-and-power company, which is seeking a 12 per cent tariff increase from Government, had intended to cut about 250 employees in this phase of the redundancy which should have been carried out over two years under its Performance Improvement Plan. However, there was a flood of applications leading up to the August 18 deadline.
In a written response yesterday to questions from The Gleaner, the company said that some provision was made in its current budget for the redundancy. It said it would "consider a reduction in capital expenditure and defer those expenses which can be deferred to the next financial year without impairing the company's performance, to ensure that all separation payments are met". The company said it expected savings in labour costs as a result of the departures.
At $850 million, the figure works out at an average $2.39 million per employee although the top figure is said to be in the region of $10 million and around the $1 million mark at the low end. Most of the employees have served the company for an average 16 years with their average age being 41 years. With this loss of experience, the company has moved to identify suitable replacements from within the organisation to enable smooth transitions.
In explaining the need for the redundancies, the company said it realised from as early as 1998 that it was overstaffed by roughly 400 persons when compared with global standards, with much of the excess being in the areas of management, supervisory and clerical positions.
A Memorandum of Understanding between the company and the unions delayed the redundancy while the company reorganised in a bid to improve efficiency.
Most of the cuts will be in the area of power delivery, where 101 of 636 employees have asked to be made redundant. They are followed by 76 of 447 in customer service; 71 of 309 under the category general administration; 52 of 309 in generation; 35 of 164 in loss reduction; and 20 of 107 in finance.
