ORNL workforce reduction could save $34 million per year, mostly affect those of retirement age

 

The workforce reduction of up to 350 positions at Oak Ridge National Laboratory is expected to decrease personnel costs by about $34 million each year, and the lab expects most of those who apply for voluntary separations from the lab to be of retirement age, a spokesperson said Wednesday.

The workforce reduction, which is expected to be completed by the end of this year, was announced by new ORNL Director Thomas Zacharia in a Tuesday morning email to employees.

“From time to time, sustaining our work effectively and efficiently requires the most difficult of decisions, which is to reduce our staff in certain areas of the lab,” Zacharia said in that email.

The lab hopes to reduce its workforce of 4,800 employees by about 7.3 percent (350 positions) using voluntary separations. Involuntary separations will be used if necessary.

On Wednesday, ORNL spokesperson Morgan McCorkle said the lab plans to reduce about 250 overhead positions and 100 research and development jobs. Overhead jobs are those not directly related to research. The research and development staff who will be eligible for voluntary separations are those who charge more than half of their time to overhead accounts or whose program budgets were reduced in fiscal year 2017, McCorkle said.

A specific breakdown of the affected jobs is not yet available.

It may not be ORNL’s largest workforce reduction in recent years. In February 2011, ORNL announced a voluntary separation package, and 161 applications were accepted, McCorkle said. Later that same year, 220 applications were accepted. That’s a total of 381 voluntary separations in 2011.

There was another voluntary separation program that was announced in September 2013 that reduced staff by 189.

This year’s voluntary separations and the involuntary separations, if necessary, will both give employees standard severance benefits of one week’s pay for each year’s service for up to 25 years (or based on contract terms for members of the bargaining unit).

In response to questions from Oak Ridge Today, McCorkle said the U.S. Department of Energy did not request the workforce restructuring plan announced Tuesday, and it is not related to the budget for fiscal year 2018, which starts October 1.

Some ORNL employees have been concerned about that budget because, among other things, it proposed a roughly $900 million reduction in DOE Office of Science funding and close to a 70 percent decrease for the department’s energy efficiency and renewable energy program, along with cuts in other areas such as basic energy sciences and biological and environmental research. But in some cases, Congress has narrowed the size of the president’s proposed cuts or rejected them. For example, both the U.S. House of Representatives and Senate have so far rejected cuts to the DOE Office of Science, although there could still be reductions to other DOE programs. ORNL, DOE’s largest multiprogram science and energy laboratory, is an Office of Science lab.

“These staff reductions are not about the fiscal year 2018 budget,” McCorkle said Wednesday. “We will evaluate the effects of future funding once FY 18 budgets are finalized.”

Zacharia’s email to staff on Tuesday said the staff reductions would allow ORNL to maintain “competitive chargeout rates”—that’s a rate that DOE uses to measure cost effectiveness—and free resources for “discretionary investments that will modernize lab infrastructure and maintain core research capabilities in the mission areas assigned to ORNL.”

Oak Ridge Today asked what modernization investments are being considered that require the freeing of resources.

“We will make investments that are aligned with DOE mission priorities,” McCorkle said. “Areas such as cybersecurity and high-performance computing are areas where the laboratory expects to contribute.”

Cybersecurity has seemed like an area that is important to Energy Secretary Rick Perry, who was confirmed by the U.S. Senate in March and has mentioned cybersecurity in public appearances. And the Trump administration’s budget request included more DOE funding for advanced scientific computing research. Computing and the Oak Ridge Leadership Computing Facility at ORNL were considered bright spots in the president’s budget request.

McCorkle said the staff reduction at ORNL offers the laboratory an opportunity to reduce its costs and redirect funding toward growth areas.

“The reduction in staff, as well as other efforts to streamline operations, will allow ORNL to maintain a competitive cost of doing business while freeing resources for discretionary investments in core scientific and technical capabilities at the lab,” she said.

Zacharia said DOE has approved the workforce restructuring plan. It was proposed by UT-Battelle, which manages the lab for the DOE Office of Science.

ORNL employees can apply for the Self-Select Voluntary Separation Program, or VSP, from Monday, August 14, to September 27.

“Management reserves the right to deny any application, and employees will be notified whether their application has been accepted,” Zacharia said. “Accepted employees will leave the payroll by December 31.”

The $34 million annual savings expected to be achieved through the 7 percent workforce reduction approved for ORNL is smaller than the proposed decrease included in the budget request submitted to Congress by President Donald Trump in May. If Trump’s budget request were to be enacted, the lab’s funding would drop about $185 million, from roughly $1.247 billion in fiscal year 2017, which ends September 30, to close to $1.062 billion in fiscal year 2018. That would be a decrease of roughly 15 percent.

Announcing this year’s workforce reduction to employees on Tuesday, Zacharia said ORNL has worked to control business costs in order to be a good steward of taxpayer funding, to maximize the resources available for strategic investment, and to keep lab costs competitive with ORNL peers.

“We’ve controlled chargeout rates, consolidated operations, and contained health-care costs,” Zacharia  said in his email. “We’ve also increased investment in lab-directed research and development, expanded key programs, and continued modernizing the campus.”

The most effective way to navigate uncertain times is by demonstrating leadership, Zacharia said.

“Excellence and adaptability have been hallmarks of ORNL throughout its history, and the Department of Energy has entrusted us with uniquely powerful scientific tools that enable exceptional capabilities,” Zacharia said. “Thank you for your continued commitment to ORNL’s missions in energy, scientific discovery, national security, and industrial competitiveness.”

More information will be added as it becomes available.

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