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December 28, 2004
Bechtel Corp. will cut about 200 jobs in January from its San Francisco headquarters, which has been losing staff as the construction and engineering giant moves a few of its divisions elsewhere.
Some of the upcoming job losses are the result of Bechtel's decision, reported earlier this year, to relocate one of its most prominent divisions to Frederick, Md. Bechtel National, which has spent the past 20 months rebuilding Iraq's infrastructure, is moving to be closer to the federal government, its main client.
About half of the job losses, however, are tied to a specific Bechtel program that has been partially frozen by the U.S. military.
Bechtel leads a team of companies picked two years ago to design and build a plant near Pueblo, Colo., for neutralizing old chemical weapons. The Pentagon halted design work on the project in September after auditors complained about overruns in the project's long-term costs.
Originally projected at $1.5 billion, those costs are now estimated at $2. 65 billion. The project team is searching for ways to slash the price, according to the Defense Department's Assembled Chemical Weapons Alternatives program.
Bechtel has been based in the Bay Area for the company's entire history, stretching back nearly a century. It has moved most of its 40,000 employees to other states or countries, however, as it builds roads, airports and natural gas plants around the globe.
One Bechtel division is based in London, another in Australia. About 1, 400 employees work in the company's Beale Street headquarters, but spokesman Jeff Berger said none of the company's major divisions remains in San Francisco.
Still, it has no plans to relocate its headquarters, he said. The 205 planned job cuts Bechtel reported to the California Employment Development Department reflect changes in the Pueblo program and Bechtel National's move to Maryland, not an abandonment of the Bay Area. The layoffs are scheduled to take effect Jan. 5, according to the employment department.
"It's Bechtel people moving to Frederick," Berger said. "That plan ... has come to fruition."
Some employees have moved with the division. Others lost their jobs after choosing not to move, Berger said, while other jobs were eliminated.
Located about 50 miles northwest of Washington, Frederick has become home to several Bechtel business units, including those that handle telecommunications projects and electrical power.
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