alabama saw a major shakeup inside its largest water utility on Friday, March 13 (ET), when Central Alabama Water laid off more than 130 employees in Birmingham. Central Alabama Water said the reduction in force was necessary to avoid a 10% rate increase and to protect the organization’s financial viability. The move landed less than 48 hours after a financial filing showed the utility is losing more than 53% of the water it treats to leaks or unbilled customers.
Layoffs hit all divisions as utility targets labor savings
Central Alabama Water (CAW), described as Alabama’s largest water utility, said it fired 135 employees—23% of its workforce—and eliminated 76 vacant positions, bringing the total reduction to 211 funded positions. The utility said all divisions were impacted.
After the cuts, CAW said it will employ 449 people., the utility said it believes the changes will save $20. 1 million per year in labor-related expenses.
CAW framed the layoffs as part of a broader push to stabilize its finances. The utility tied the decision to avoiding a 10% rate increase, while also pointing to the need for a “markedly different course” than its predecessor organization, which for most of the prior span was known as the Birmingham Water Works Board.
CEO Jeffrey Thompson: “Extremely difficult, ” but “absolutely necessary”
CEO Jeffrey Thompson said the layoffs followed months of internal planning and review. “This was an extremely difficult decision, but it was absolutely necessary to maintain the organization’s financial viability, ” Thompson said. He added that the plan came after “months of deliberation, careful analysis and assessing both the utility’s immediate and future needs, ” while acknowledging the impact on employees and their families.
Thompson also pointed to the expectations placed on the utility under its enabling legislation. “Our enabling legislation makes it clear that CAW must take a markedly different course from our predecessor organization, ” Thompson said. “Our customers are counting on us to take the steps necessary to reverse financial trends established over many years and to emerge stronger and better equipped to provide the world-class service they deserve. ”
In December, Thompson told the CAW board that he and the senior management team would bring an amended budget plan for 2026 in March and warned it would likely include significant changes.
Workers respond with Friday afternoon press conference
Several of the employees fired Friday held a press conference Friday afternoon (ET). Cassandra Patterson, one of the workers who spoke, said she was called into a meeting Friday morning and told she had to retire.
“We need to stand our ground, ” Patterson said. She also said she planned to stand with other employees affected by the cuts: “I’m going to stand with these employees whether I’m up here or not, ” Patterson said.
Patterson said she was told she has until April 27 (ET) to sign her severance papers. The utility’s announcement did not provide additional individual timelines beyond what was described at the press conference.
Quick context: water loss, long-running cost pressure
The layoffs came shortly after a financial filing showed CAW is losing more than 53% of the water it treats to leaks or unbilled customers. That filing also stated that customers using 6 CCF of water a month—described as the “average” customer in the utility’s modeling—now pay 354% more than they did in 2001, or four times the national rate of inflation.
What’s next: CAW board set to consider amended 2026 budget March 20
The CAW board is set to consider the amended budget next Friday, March 20 (ET), a decision point that could clarify how the utility plans to operate after the job cuts and position reductions. For now, the utility is moving forward with the reorganization as it argues the steps are necessary to reshape its finances and operations in alabama.
