Livermore lab warns of layoffs

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Livermore lab warns of layoffs
By Betsy Mason, STAFF WRITER
Article Last Updated: 11/12/2007 07:26:59 PM PST

Just six weeks after a new manager took charge, Lawrence Livermore National Laboratory announced Monday it will lay off of as many as 500 employees due to increasing costs.

At an all-hands morning meeting, lab director George Miller told employees that 2,000 of them would be given notice this week that they are among those whose jobs are in jeopardy.

Those laid off will be temporary workers with fixed-term contracts known as flex-term employees and supplemental labor workers hired through contractors including IAP Worldwide Services.

In addition to the impending 500 layoffs, at least 50 of these employees have already been let go, triggering the Warn Act which requires management to notify employees of the possibility of a mass layoff.

"The goal of our flexible workforce is to be able to release people as needed," lab spokeswoman Susan Houghton said.

The core workforce, which includes scientists and engineers, will not be affected by this round of labor cuts, Miller said, but may be included in potential future layoffs depending on the Department of Energy's 2008 budget.

"He told them we have a $300 million budget problem," Houghton said.

The shortfall stems from a number of things including increased costs associated with the change on Oct. 1 from being managed by the University of California, a nonprofit public entity, to having Lawrence Livermore National Security, LLC, which is a partnership with the university and several companies led by Bechtel Corp.

"It really feels like a betrayal," said Sue Byars, a site planner at the lab. "We were pretty well assured that the new contractor saw ways to be more efficient and effective with the budget."

During the bidding for the lab contract, the Department of Energy claimed that bringing private industry into the management mix would increase efficiency and save money in addition to bolstering safety and security.

The new management anticipated costs would initially rise about $80 million, but that these costs would be overcome in years to come as the lab became more efficient. The expected costs included a $46 million management fee paid by DOE to the managers and taxes that the lab had previously been exempt from under the university.

But the actual cost increase is closer to $130 million, Miller told employees.

Other costs higher than unexpected include health care which is expected to be $20 million more because the lab alone is a smaller group than when it was associated with the university. More employees than anticipated chose the costlier of two retirement benefits options, and attrition has been lower than usual as employees wait to see if separation packages will be offered in the case of layoffs.

On top of that, inflation added another $50 million, she said.

Further adding to the problem, Congress still has not agreed on a budget for the DOE for 2008. Miller said he hopes to have a budget in January, but until then, the lab is operating at 2007 funding levels which are lower than the budget request for 2008.

The lab stands to lose as much as $150 million in federal funding, largely in nuclear weapons work. If this happens, the next round of layoffs could include as many as 300 permanent employees, Houghton said. The lab's goal is to protect scientific research positions, but it is not known if any scientists will be laid off.

The lab is looking at places other than labor to reduce costs, she said.

"But ultimately we're going to have to look at people because two-thirds of our costs come from labor," she said.

The workers affected by the current labor cuts will be notified by mid-December. Flex term employees are entitled to two weeks notice and two weeks severance pay. Supplemental labor contractors will not receive notice or severance.

"This is not an easy decision, and there is never a good way to let employees know they might lose their jobs."

Betsy Mason covers science and the national laboratories. Reach her at 925-952-5026 or bmason@bayareanewsgroup.com.