Unocal Corp. announced Wednesday that it will reduce its corporate staff by about 40%, or 630 positions, during the next two years.
The job cuts, part of a restructuring begun four years ago, will be made in the accounting, administration, legal, planning, human resources, computer services and community affairs departments, the company said.
The cuts, which should save about $50 million a year, will come at Unocal's headquarters in Downtown Los Angeles and its offices in Anaheim and Sugar Land, Tex., near Houston. Unocal said it will take a one-time charge of about $25 million in the fourth quarter for costs incurred from the staff cuts.
"We've downsized the company considerably over the past few years as we have focused on fewer operating businesses," Chief Executive Roger C. Beach said in a statement. "Now we are reorganizing the support groups. . . . We deeply regret that we have to eliminate jobs."
All U.S. oil companies have undergone sometimes dramatic contractions since the price of crude oil tumbled in the late 1980s. Low oil and gasoline prices have forced them to look for more efficient ways to do business.
"Everybody is cost cutting like crazy, and it's been quite effective," said Holly Gustafson, an analyst with NatWest Securities/Washington Analysis in Washington. Other oil companies announcing major staff cuts recently include Mobil, Atlantic Richfield and Texaco.
Through a series of unit reorganizations and asset sales, Unocal's worldwide employment by January had fallen to 13,613 people from 17,286 in 1990.
Some of the jobs have gone with the businesses the company sold. About 2,500 positions have been eliminated through voluntary buyouts, early retirements and layoffs. The latest reduction represents a substantial portion of Unocal's corporate staff of 1,500, but many analysts were not surprised.
"It's consistent not only with petroleum industry trends, but also with that of corporate America in reducing administrative and broader organizational costs," said Keith C. Klaver, partner at Price Waterhouse World Petroleum Industry Group in San Francisco. "U.S. corporations now have to be competitive not only locally, but globally."
The first 230 Unocal employees identified for the cuts--divided about equally between offices in Los Angeles and Orange County--learned Tuesday that their jobs would be eliminated.
In Orange County, Unocal also has about 600 workers at a research facility in Brea, and about 100 more employees scattered throughout the county.
Another 400 workers will be notified Dec. 1, Unocal spokesman Barry Lane said. Most of the 630 employees to be let go will be laid off in stages through 1995 and 1996, though some may be able to find jobs elsewhere in the firm, the company indicated.
Some corporate functions will be eliminated as the work force shrinks, the company said, and other work will be farmed out to contractors--including computer, communications and in-house medical service.
Unocal will close down its company clinics next year and contract with outside firms for pre-employment physical examinations and similar services.
"None of the services being eliminated will be evident to the customer," Lane said.
Unocal shares slipped 12.5 cents to $28.875 on the New York Stock Exchange on Wednesday.