Arco Employees Get the Word on Early Retirement Package
For Gary Drake, a 22-year-veteran of Atlantic Richfield’s information systems department in Los Angeles, the big oil company’s sweetened early retirement package came along at just the right time.
“I was thinking about making a change,” Drake, 48, said as he took a coffee break one morning last week. “This was just the incentive I needed.”
The package adds five years to the age and service of employees who have worked at Arco for at least five years. It also gives eligible employees a bonus equal to 1 1/2 weeks pay for each year of service, a fat going-away present for long-time employees. Arco, which aims to trim its 38,000 work force by up to 13%, hopes it will be enough to nudge thousands off the payroll.
The work force reductions are part of a sweeping restructuring announced two weeks ago by the nation’s seventh largest oil company. Arco says it will sell or close its eastern marketing and refining operations, including its Philadelphia refinery and 2,000 gas stations, because a continuing oil glut and reduced demand have made the oil industry more competitive and less profitable. About 2,000 people work in those operations.
In interviews last week, many older employees like Drake said that they’re eager to bid Arco goodby, and enjoy retirement or start their own businesses. But younger employees who want to continue working at Arco say they’re worried. The company has said that if too few employees retire, layoffs will be necessary.
“I don’t know anyone who doesn’t have a resume out,” said a 40-year-old Arco computer programmer. “I think I’m safe, but I don’t know.”
Last Wednesday, Arco employees who have been with the company five years or longer received personalized packets which told them how much money they would receive if they retired by Aug. 1.
“I’m gone,” said a 59-year-old employee of Arco’s crude supply department, where he’s worked for 30 years. Like most of the two dozen employees interviewed last week, he asked that his name not be used. His younger co-workers are uneasy, he said. “Everyone is waiting for the dust to settle. No one is sure how this is all going to shake out.”
“The question is: how many of those floors are going to go,” said a 57-year-old Arco lawyer, looking skyward at Arco Tower corporate headquarters at 515 Flower St. in downtown Los Angeles.
The feeling around headquarters last week was an odd mixture of shock, joy, frustration and confusion, employees said.
“It’s kind of funny in there,” said a woman who had been told her job was “safe,” but has many friends who are leaving. “I think there’s more camaraderie now than there ever was. Everyone’s getting together and talking about their numbers”--the size of their retirement packages.
Last week, 300 to 400 of the 2,000 employees at Arco headquarters attended 90-minute-long sessions to learn more about their retirement benefits and how, for example, taxes might affect the amounts they receive. Arco has also established a hot line phone number, in use during business hours for questions about the retirement package. Both programs are offered company-wide.
Begining today, the company is sponsoring a two-day session on job-seeking skills, such as resume preparation and job interview skills. An Arco spokesman said the session is intended as a help to early retirees “looking for second careers,” not as a prelude to layoffs. But Arco employees were also told last week that, if they were let go, they would receive three weeks’ pay for each year of service. Arco declined to say how much the package will cost.
“People just wish they knew whether they are going to be laid off or not, so they could make plans,” said the computer programmer, who’s the father of two daughters, ages 10 and 12. “It’s the uncertainty that’s getting to everybody.”
Arco has said that it expects the number of layoffs to be small, but executives say they can’t be specific until after June 30, the deadline for accepting the early retirement plan. If Arco sells its eastern operations, the work force would be reduced “by transfer from one employer to another,” an Arco spokesman said.
Some employees said they’ve been told how heavily the cuts will affect their divisions, but Arco wouldn’t confirm the cutbacks. Employees in petroleum products and refining said they were told to expect a 48% cutback; international exploration and testing employees said the department would be cut by 33%. The 150-member public affairs department will be sharply reduced, according to employees who said some of the responsibilities would be reassigned to other departments.
A Little Frightening
“My job’s been eliminated, so I guess I have no choice but to take the package,” said Henry Spier, 52, an Arco speech writer. Spier said he felt “a lot of optimism, and a little fear.” While he has an opportunity to do something new, “it’s a little frightening to leave behind a place where you’ve worked for 17 years,” he said.
A 41-year-old systems analyst, who said he was ineligible for early retirement, said he joined Arco four years ago after 12 years at Rockwell International, where he escaped a round of layoffs.
“I came here because the pay was a little better and I thought it was a nice stable industry,” he said wryly.
“I thought that all that crude on the North Slope would keep them going for years,” he said, referring to Arco’s Alaskan oil reserves. “I really picked a good one.”
