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AEP aims to cut more jobs through voluntary severance program after January layoffs
American Electric Power this week started a new round of job reductions, introducing a voluntary severance program that the power company says is necessary to cut the size of its workforce.
“As we look ahead, the gap between AEP’s revenue and what’s needed to run the business continues to grow. After significant consideration, it’s clear that reducing our workforce is a necessary step to help overcome this challenge,” AEP interim CEO Ben Fowke said in an email to staff. “We believe we can achieve most of this reduction through the voluntary severance program we are launching today. ”
A worker who asked not to be identified provided the email to The Dispatch.
The email didn’t identify the number of workers being targeted by the company.
The company said in a statement to The Dispatch that about 7,400 of AEP’s 16,800 employees are eligible for the program. Columbus-based AEP serves 5.6 million customers in 11 states from Michigan to Texas and has the nation’s largest transmission system.
“Some groups of employees are not eligible, including those with jobs directly related to building, operating and maintaining a safe, reliable electric grid,” AEP said. “This workforce reduction effort will help us continue to focus on providing safe and reliable power to customers while keeping their bills affordable as we make needed investments in the energy system.”
In January, AEP laid off 270 workers, including 170 in Ohio.
“As we’ve seen over the past two years, we are operating in an increasingly complex environment. External factors such as high interest rates and inflation continue to impact the company and our customers, and unfortunately, these challenges are likely to continue for the foreseeable future,” Fowke said in the email to workers. “Looking ahead, we need to better align our operating costs with the economic realities we face. ”
Fowke took over the top spot at AEP in February on an interim basis, replacing Julie Sloat who was removed after just a year on the job.
Sloat left after the company struck a deal with billionaire activist investor Carl Icahn to give him two seats on the company’s board. In addition, a third member of the Icahn team will serve as a non-voting observer at board meetings.
Icahn holds about 5.3 million shares of AEP stock, or about 1% of all the company’s shares.
The worker who provided the email say they are stressed over the program. They said the company laid off workers in February because not enough took the severance package that was offered then.
“The overall morale is the lowest I’ve seen it since I’ve started,” the worker said. “We are all in the same boat that we could be let go at any moment. The realization that you are simply a number or a percentage is not a good feeling. The meetings are somber and questions left answered because no one knows.”
Workers interested in the offer have until May 6 to decide if they want to apply. The company said the workers will be notified by June 3 if their request was accepted or declined.
mawilliams@dispatch.com
@BizMarkWilliams
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