Unocal to Cut Up to 800 More Staff by End of Year
Unocal Corp. announced Monday that it will trim an additional 400 to 800 employees by the end of the year, completing personnel cuts expected to meet its cost-reduction goals.
The Los Angeles-based oil firm said it expects to take a one-time, $35-million charge in the third quarter because of the cutbacks.
Most big U.S. oil companies have been trimming personnel and assets in a tough financial environment. At Unocal’s recent annual shareholders’ meeting, Chairman and Chief Executive Richard J. Stegemeier announced 1991 net earnings of $73 million, compared to $401 million in 1990, a performance he described as “clearly a disappointment.”
Unocal’s aim is to cut $200 million annually in operating costs and trim $700 million in assets--to reduce debt by $1.5 billion over the next five years. Current debt stands at $4.7 billion, a legacy of its successful battle in 1985 to defeat a takeover bid by Texas investor T. Boone Pickens.
On May 6, the oil company said it would sell $350 million in “non-strategic” assets, mainly among its producing U.S. oil fields.
Unocal’s latest statement brings to 800 to 1,200 the planned job cuts in the latest round of employee trimming. The firm announced recently that it would cut 400 jobs in its energy resources group. Last year, the company announced other job cuts, including 200 in its headquarters staff and technology research center. The firm employs 17,000.
Under the latest reductions, employees at least 55 years of age with 10 or more years with the company will be offered augmented retirement packages until Aug. 31. Layoffs will then be used to reach the goal of having personnel cuts account for half the $200-million annual cost-saving goal.
The final number of layoffs will depend on how many, and which employees, accept early retirement.
Separately, the U.S. Supreme Court on Monday refused to kill a $150-million lawsuit against Pickens’ Mesa Petroleum Co. stemming from the 1985 attempt to take over Unocal. The justices, without comment, left intact a federal appeals court ruling that removed a key defense Pickens’ company raised against Unocal’s allegations that Mesa had engaged in illegal insider trading.
A federal trial judge cited that defense in throwing out the suit. But the U.S. 9th Circuit Court of Appeals reinstated the suit after ruling that the federal securities law defense did not apply.
