Northeast Utilities, headquartered in Boston and Hartford, plans to cut 40 percent of its information technology department jobs over next several months, offering voluntary buyouts to try to eliminate roughly 160 positions.
The utility, which merged with NStar in April 2012, has been working with a consultant to restructure its 400-person IT department for the past year as it tries to integrate the two companies, and deliver an estimated $780 million in merger-related costs savings to shareholders and customers.
A February memo to employees, obtained by the Globe, called the changes in IT one of the company’s “key initiatives for 2013.”
It was unclear Tuesday just how many jobs in Massachusetts would be affected, as the IT department is split throughout the company’s service territory, with about 25 percent in Massachusetts. The department’s restructuring will begin in November, with the company keeping roughly 200 IT jobs in-house and outsourcing about 40 to two global firms in India, Infosys and Tata Consultancy Services Ltd. Those 40 jobs, while reporting to the companies in India, will remain stationed at Northeast Utilities offices.
The company said it hopes that enough employees will voluntarily accept a “generous” severance package to avoid layoffs. The company did not detail which jobs would be eliminated. Depending on whom took the buyout, it would retrain remaining workers whose jobs changed as a result of the reorganization.
“Our goal here is to build one integrated, forward-looking, technology savvy organization that can keep pace,” said David McHale, Northeast Utilities’ executive vice president and chief administrative officer. McHale said he didn’t expect any employees to leave the company before the end of the year.
The job cuts are mostly due to Northeast Utilities’ nearly $20 billion merger with NStar in early 2012, which created one of the nation’s largest utilities, serving nearly 3.5 million electric and gas customers in Massachusetts, Connecticut, and New Hampshire.
As a result of the deal, NStar and Northeast Utilities said they expected to achieve roughly $780 million in savings over the 10 years, in part by eliminating duplicate administrative functions and jobs. Some of the savings will be passed along to ratepayers.
During state regulators’ review of the merger, Attorney General Martha Coakley negotiated a one-time, $21 million rebate for Massachusetts residents who get their utility services from Northeast Utilities subsidiaries NStar and Western Massachusetts Electric Co.Erin Ailworth can be reached at email@example.com. Follow her on Twitter @ailworth.