The Chattanooga Times Free Press reports it will be the largest staff reduction at the federal utility in more than 20 years.
Cuts also are planned in TVA's nuclear program and involuntary layoffs are expected later this year.
The cuts are being made so staffing levels and electric rates will be more in line with other utilities as power consumption growth slows.
TVA President Bill Johnson says he wants a $500 million reduction in annual expenses by next year.
"We have had higher operating costs than some of our neighbors, so we're looking at ways to bring our costs down and operate more efficiently," TVA spokesman Duncan Mansfield said. "It's all driven toward trying to keep our rates low."
TVA said power demands peaked in 2007, but have dropped since then due to the economic downturn in 2008-09 and increased conservation and energy efficiency since then. It doesn't expect to reach peak demand again for another 10 years.
Johnson said TVA has had higher than normal budget and staffing because the utility needed to catch up on deferred maintenance and investments from when it tried to avoid rate increases in the 1990s and early 2000's.
"Generally, capital spending should be equal to amortization, but there were periods in the past when our capital spending was half of our amortization," Johnson said. "Not raising rates for so long was a laudable goal, but it's like that Fram commercial, 'Pay me now or pay me later.'"
TVA also had a large staff reduction in 1994, when it cut more than 2,400 jobs.
TVA supplies power to about 9 million people in Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia.
The utility has opened centers in Chattanooga, Knoxville and Muscle Shoals, Alabama, to help displaced workers.
"We have folks in each center to help workers wanting help with writing resumes, searching for other jobs or making other career adjustments," TVA spokeswoman Gail Rymer said.
Information from: Chattanooga Times Free Press, http://www.timesfreepress.com
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