From: Charles F. McMillan
Date: February 21, 2012
Subject: Cost Management and Workforce Planning
On Thursday, the Laboratory submitted a plan to NNSA calling for a
voluntary separation program (VSP) with a severance package based
on years of service. There are three main reasons why we are
taking this action now:
* Our current budget and future financial outlook require
significant cost-cutting to position the Lab for FY13 and
beyond. In FY12 alone, we face a budget reduction of around
$300 million across multiple programs.
* By implementing a voluntary separation plan, we mitigate the
possibility of an involuntary separation program later; and
* We are positioning the Laboratory to meet future mission
needs with a smaller workforce. For a variety of reasons,
attrition has been low for the last three years, so we
cannot rely on attrition alone to achieve workforce
When I established the Laboratory Integrated Stewardship Council
(LISC) in November, I knew it was necessary to take immediate
measures in anticipation of significant budget uncertainties.
The LISC has managed decisions on hiring actions and large
procurements to ensure that we proceed only with actions that are
reasonable and necessary. Additionally, the principal associate
directors have championed initiatives to reduce costs related to
travel, materials, and services. We also have invited employees to
submit their own ideas for cost-cutting, and have established a
committee to review every idea and to present recommendations to
While I am pleased with the progress and the savings from these
actions, the Lab needs to take additional steps for FY13 and
beyond. With labor comprising 63 percent of the budget, a smaller
workforce is part of the solution.
I have asked the LISC to monitor and recommend appropriate action
with respect to reducing costs associated with our flexible
workforce. In that vein, the LISC has already capped student
hiring at 2011 levels. Craft employment has always fluctuated
based on available work and will continue to do so. Analysis
continues of the term and staff augmentation workforce.
With respect to the regular workforce, the VSP we submitted
proposes a regular workforce reduction of 400 to 800 employees to
align our funding with our missions.
One of our top priorities as we go through this process will be to
ensure we meet mission deliverables this year and going forward.
Similar to the voluntary program in 2008, critical skilled
positions will be excluded from eligibility. In addition, we will
decide whether to decline individual applications based on the
need to retain a sufficient number of employees with certain
essential skills. Though we also retained that discretion in 2008,
we did not exercise it. Unlike the program in that year, we expect
to deny some applications in this VSP.
We anticipate the VSP will be completed in a matter of weeks
rather than months. Knowing that many of you face a difficult
personal decision, I encourage you to begin thinking about the
program now. We will provide details of the plan to you
immediately after NNSA approval. Human Resources will be prepared
to respond to your benefits questions and will schedule
We are committed to treating all employees fairly and respectfully
in this process. We did so during the voluntary program in 2008
and we will do so again. I will maintain open and effective
communication with you and other stakeholders of the Laboratory.
This includes all-employee meetings such as the one scheduled
today. Please remember that we are still in a planning phase, and
there are many questions to which we do not yet have answers. We
will have more details as soon as NNSA approves the plan.
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