Business

Northeast Utilities to cut about 160 IT jobs

NStar trucks were in position in Orleans hours before the expected landfall of Hurricane Sandy in October 2012.
Matt Campbell/EPA/File 2012
NStar trucks were in position in Orleans hours before the expected landfall of Hurricane Sandy in October 2012.

Northeast Utilities, headquartered in Boston and Hartford, plans to cut 40 percent of its information technology department jobs over the 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 for the past year to reorganize its 400-person IT department as it tries to integrate the two companies and deliver an estimated $780 million in merger-related cost 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.”

Advertisement

It was unclear on Tuesday just how many jobs in Massachusetts would be affected, as the IT department is split among offices in the company’s service territory, with about 25 percent in Massachusetts.

Get Today's Headlines in your inbox:
The day's top stories delivered every morning.
Thank you for signing up! Sign up for more newsletters here

The department’s reorganization will begin in November, with the company keeping roughly 200 IT jobs in-house and outsourcing about 40 to two 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 the terms of the severance package.

Depending on which employees take the buyout, the company 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.

Advertisement

McHale said he did not 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 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 two Northeast Utilities subsidiaries, NStar and Western Massachusetts Electric Co.

Advertisement

Krista Selmi, a spokeswoman for the Executive Office of Energy and Environmental Affairs, which oversees the Department of Public Utilities, said state regulators had been notified of the changes, as the utility agreed to do when its merger was approved. A spokesman for Coakley, the state’s ratepayer advocate, said her office has been in contact with Northeast Utilities and will monitor the situation.

Erin Ailworth can be reached at eailworth@globe.com. Follow her on Twitter @ailworth.