Exxon Mobil Sees Greater Cost Savings, More Layoffs

The merger of Exxon and Mobil will bring bigger cost savings than expected for shareholders, though thousands more employees will lose their jobs, company executives said Wednesday.

Exxon Mobil Corp. will cut almost 16,000 jobs--about 15% of its work force--by the end of 2002, an increase from the 9,000 cuts estimated when the companies announced plans to merge a year ago.

The number of job losses in California is not known because a breakdown of layoffs by region has not been developed yet, an Exxon Mobil spokeswoman said.

Chairman Lee Raymond and Vice Chairman Lucio Noto met with securities analysts at the New York Stock Exchange, Exxon Mobil’s first meeting with analysts since regulators approved the $81-billion merger on Nov. 30.

Raymond said the company’s outlook for cost savings and improved earnings was even better than executives had expected, at $3.8 billion per year instead of the $2.8 billion estimated a year ago.

As a result, the combined company will earn about $1 billion more next year and $2.5 billion annually by 2003, Raymond said.

Raymond said the sale of assets required by regulators--including a refinery and more than 2,400 service stations--will raise up to $5 billion and create a net gain of about $1 billion.

Analysts expect the company to put money from the asset sales into oil exploration and production.

Noto said 6,000 of the 16,000 cuts will come from retirements, and 10,000 from layoffs.

More than half of the cuts will be made in the next year--4,000 in the United States and 6,000 abroad, Noto said, with Exxon employees accounting for 60% of the cuts.

One thousand job cuts will come at the management level, but the company would not specify from where the other cuts would come. About 2,000 people had already lost their jobs before the merger was completed, officials said.

Analysts had expected the higher estimates of job cuts and savings.

Shares of Irving, Texas-based Exxon Mobil rose 69 cents to close at $83.06 on the New York Stock Exchange.