LANL plans workforce reduction

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By John Severance

Back in December, Los Alamos National Laboratory Director Charlie McMillan announced the formation of a task force that would make financial decisions that would account for $300 million in savings at the lab because of budget constraints.

Everybody found out Tuesday how that would happen.

Los Alamos National Laboratory Director Charlie McMillan said the lab has submitted a plan to the National Nuclear Security Administration proposing to reduce its workforce by between 400 and 800 employees this spring through a voluntary separation program.

McMillan made the announcement at an all-hands meeting at the lab Tuesday afternoon.

“We are taking these actions now in an attempt to reduce the risks of involuntary layoffs,” McMillan said. “When combined with a suppressed attrition rate for the past three years, our current budget and future outlook require significant cost-cutting. The plan we’re submitting will position the lab to continue executing our missions today and in the future.”

The plan must receive NNSA approval.

In the meeting with employees, McMillan said a combination of factors has led to the proposed action:

• The lab’s Fiscal Year 2012 budget is more than $300 million lower than 2011-- $2.2 billion versus $2.55 billion.

• Future budgets are expected to be flat or lower.

For a variety of reasons, attrition has decreased in the past few years.

“With a smaller workforce possessing the essential skills, we will be better positioned to deliver on current and future national security commitments. Allowing employees to apply for voluntary separation is a prudent step,” McMillan said.

NNSA spokesperson Toni Chiri confirmed the approval process was underway.

"The National Nuclear Security Administration can confirm that Los Alamos National Laboratory management has submitted a request for authorization to offer incentives to certain eligible staff who agree to voluntarily separate within defined timeframes,” Chiri said. “Agency policy requires approval of this request by several management and contract administration components within NNSA. Details of the incentive plan will be available subsequent to final approval.”

Commenting on the lab initiative, NNSA Los Alamos Site Office Manager Kevin Smith said: "We’ve been working closely with LANL management to interpret and adjust to the multi-year budget outlook.  The voluntary incentive proposed by LANL is one of several proactive measures targeted toward preserving critically important programs as well as research and innovation, while fiscally positioning the lab for the future."  

Other details emerged about the program later Tuesday.

• Certain job functions are not included in the voluntary separation program.   Also, some applications may be denied to maintain a sufficient level of skills.

• Details of the voluntary program will be made available after NNSA approves the Lab’s plan.
• The lab’s student programs will not be cut but will remain capped at 2011 levels.
• A team of senior managers, formed in late 2011, will continue other aggressive cost-curbing measures.
“I’m very hopeful we can achieve the savings we need without an involuntary workforce reduction.  We were successful when we took similar action in 2008,” McMillan said. “I am fully aware of the economic footprint this Lab has in Northern New Mexico, and we’re taking every possible step to minimize the impacts.”

The decision comes on the heels of President Obama’s budget request that would defer the Chemistry Metallurgy Research Replacement facility project would be deferred for at least five years.

County officials said they were told the deferment would result in a loss of 1,000 planned construction jobs.

 "It was big time disappointment on CMRR and now this." said Sharon Stover, Los Alamos County Council chair. "I'm not sure what's changed in the last few months, but we have a delegation that is going to D.C. next month. ... Our goal is to keep the lab healthy. I thought it looked good for Los Alamos with the numbers for the NNSA. But they distributed money to their different sites and we took a hit. We have to reverse the trend in what is happening in Los Alamos.”  

Rep. Jim Hall (R-Los Alamos, Santa Fe and Sandoval Counties) said this was one more disappointment in the President’s budget.

 “It seems incongruous to me to (1) propose major reductions in the nuclear weapons stockpile on the one hand and (2) cut the budgets of those responsible for ensuring the safety and reliability of that same stockpile,” Hall said.

“As weapons age and become ever more dependent on outdated technology, the credibility of our nuclear deterrent will suffer. The precise nature of the consequences are unknown, but none of the scenarios are positive.”

Kevin Holsapple, the Executive Director, Los Alamos Commerce and Development Corporation/Chamber of Commerce, said it is never desirable to hear about cuts in budget, but it is a reality in today's economic environment.

“How this will affect the businesses in the community and the community in general will depend on a lot of the details that aren't clear just yet.  I am concerned about subcontractor companies ... they are an important part of the local economy and there was no mention of how they might be affected or whether they can expect to be disproportionately affected.

“ It will also remain to be seen how this will fan out into the retail and non-profit sectors.”

Holsapple said the demographics of people taking the voluntary separation will also be important to understand. He said if the demographics hold to form, between 200 and 400 Los Alamos residents will take the voluntary separation package.

“Some may be interested in starting some kind of entrepreneurial effort and if so, our organization will be there as a resource to help them figure that out,” Holsapple said.  “This does point out the importance of several of the goals in the County's economic vitality plan including working on diversification whenever opportunities present themselves and working as a community to support the long term success of LANL in every way we can.”