TEPCO considering early retirement plan to cut costs

November 17, 2013


Tokyo Electric Power Co. plans to cut costs by offering early retirement packages for up to 1,000 employees, but some executives say a reduction in manpower could exacerbate the problems the utility faces.

TEPCO is now discussing whether to include the early retirement program in its rebuilding plan that will be revised before the end of the year, sources said.

One purpose of the proposed cost-cutting measure is to quell criticism against TEPCO--and calls for its bankruptcy--as the government moves toward using public funds to help the utility deal with the crisis at its stricken Fukushima No. 1 nuclear power plant.

The company is thinking of an early retirement program that would cover several hundred to about 1,000 employees, but the terms for those who agree to retire early have not been settled, sources said. If implemented, TEPCO will offer the package in the first half of the next fiscal year after reaching an agreement with the company labor union.

However, some TEPCO officials are hesitant about the plan, citing the enormous difficulties in decommissioning the reactors at the Fukushima No. 1 plant and ending the persistent problem of radioactive water leaks at the site.

“We are going ahead with compensation matters and power generation with the minimum number of workers so now is not the right time to be reducing the work force,” one TEPCO executive said.

The utility would also have to come up with additional funds to finance the early retirement program, which would be TEPCO’s first since the Fukushima nuclear accident started in March 2011.

As of March this year, TEPCO had about 37,000 employees, a decrease of about 2,400 from April 2011. The decline is due to a sharp increase in the number of workers who have left the company and the utility’s restrictions on new hires.

Under its current rebuilding plan, TEPCO set a goal of reducing its work force to 36,000 by the end of the current fiscal year. That target has nearly been reached, but implementing an early retirement program could show the public that it is serious about downsizing.

The ruling Liberal Democratic Party and coalition partner New Komeito have submitted a plan for the government to use public funds to cover some of the costs of decontaminating areas polluted by radiation.

The central government has already decided to use 47 billion yen ($469 million) in public funds to build an underground wall of frozen soil to prevent groundwater from entering the Fukushima plant site and mixing with contaminated water.

These plans have sparked criticism that taxpayer money is being used to prop up TEPCO. Some members of the ruling and opposition parties have even called for the utility to undergo bankruptcy proceedings.

TEPCO’s revised rebuilding plan also includes: splitting off a separate company to handle the decommissioning of reactors and contaminated water problem; creating a holding company in fiscal 2016 or later; and eliminating all 10 branch offices of the company.

(This article was written by Takashi Ebuchi and Mari Fujisaki.)

  • 1
submit to reddit
TEPCO's company name plate at the utility's head office in Tokyo's Chiyoda Ward (Asahi Shimbun file photo)

TEPCO's company name plate at the utility's head office in Tokyo's Chiyoda Ward (Asahi Shimbun file photo)

  • TEPCO's company name plate at the utility's head office in Tokyo's Chiyoda Ward (Asahi Shimbun file photo)

More AJW