MTA plans job cuts, cost-cutting consolidations

January 28, 2008 10:29:49 AM PST
The MTA is planning to cut 242 jobs as a way to save $40 million annually. Officials say the Metropolitan Transportation Authority also plans to consolidate finance, personnel and information technology operations of its agencies into a central business center. The job cuts will be across its several divisions.

MTA Executive Director and CEO Elliot Sander calls it a "giant step" toward making the agency "more efficient, leaner and more integrated."

The cost-cutting consolidation will cost between $170 million and $235 million to start up.

The analysis, presented today to the MTA Board's Audit Committee, recommends that the MTA establish a Business Service Center (BSC) to provide finance and human resources transactional services for all MTA agencies.

A critical aspect of the initiative is the adoption of an agency-wide software application with components for Accounting, Human Resources, Payroll and Procurement processing, among others. This alone would provide an additional one-time savings of $50 million that would otherwise be spent on individual replacement of or updates to each agency's existing software.

The BSC would be a back office operation overseen by MTA headquarters that would house all personnel performing these transactions. A significant portion of the projected operating budget savings would be generated from a reduction in labor costs. In the areas of finance, human resources, and IT, full-time jobs would be reduced by almost 40 percent.

The MTA intends to issue a Request for Proposals in the next two months for implementation of the BSC, with a vendor selected by the third quarter of this year. The MTA is also working with Booz Allen to develop a plan for consolidating procurements, with more than $8 million already saved on pilot projects.