Early Retirement Plan at Unocal May Attract 1,000

Unocal is trying to pare its work force with an early retirement offer that is expected to attract about 1,000 employees, the company confirmed Tuesday. Unocal has also implemented a hiring freeze.

Despite the oil industry’s retrenchment after oil prices began to decline in 1981, Unocal’s worldwide employment has remained at about 20,000 since that time. The sharp drop in prices since November prompted the current belt-tightening.

Company officials said they don’t have an employment goal in mind, but they expect about two-thirds of the 1,600 workers eligible for the program to take the offer. It is aimed at non-union employees who reach age 55 by June 30. Also excluded are senior management.

The plan effectively reduces the pension penalty for retiring early. A letter to employees explained that, for example, a 60-year-old employee with 35 years at the company would be treated as if he were retiring at age 63 with 38 years of service.

Unocal hasn’t announced layoffs or other drastic steps of the kind taken by some other oil producers. It did, however, reduce this year’s capital and exploration budget by about 20% to $1.2 billion.

The letter to employees from Chairman Fred L. Hartley and President R. J. Stegemeier said cost cutting is necessary because the industry “is under severe attack brought about by the predatory pricing of the oil exporting nations.” Overproduction by Saudi Arabia is generally blamed for an oil glut that has forced prices down.