Advertisement

California: News and Insight on Business in the Golden
State

Oxy to Cut or Transfer 230 Headquarters Jobs

Energy: Low oil prices and the sale of assets are behind the move, the company says.

November 03, 1998|NANCY RIVERA BROOKS | TIMES STAFF WRITER

Reacting to low oil prices and the effects of the sale of nonstrategic assets, Occidental Petroleum Corp. is cutting 80 jobs at its Westwood headquarters and transferring 150 other workers to its recently established Oxy Services subsidiary.

The corporate staff will shrink to fewer than 190 after the moves are complete, down from 443 at the beginning of the year, according to a letter sent to headquarters employees last Tuesday by Occidental Petroleum President Dale R. Laurance. Occidental is the nation's 10th-largest oil company, as ranked by 1997 assets of $15.3 billion.

In September, Oxy said it was laying off 80 workers at its Bakersfield oil- and gas-drilling subsidiary and was eliminating 130 other jobs. Fifty Bakersfield jobs were transferred to Oxy Services, which will centralize various services such as information technology and personnel for Occidental's corporate offices and its divisions. The home base for Oxy Services is still being determined.

"All of this is designed to ensure that Oxy is more efficient and effective, positioning us to continue to aggressively compete in our industry and grow our earnings," Laurance said in the letter, which was released by the corporation. In the last year, Oxy said, it has "both strengthened and simplified" its operations by purchasing the giant Elk Hills oil and gas field in Kern County, selling its MidCon natural gas transmission and marketing operation and some other assets not deemed strategic, and launching petrochemical and vinyl joint ventures.

A company spokesman declined to comment further on the letter.

The oil industry has been hurting because crude oil prices are hovering around $14 a barrel, about 30% lower than a year ago. Atlantic Richfield Co. on Oct. 15 announced plans to lay off 900 employees, including 270, or more than half, of its headquarters staff in downtown Los Angeles.

Occidental recently reported a 76% decline in third-quarter net income to $38 million, or 10 cents a share, which included a $12-million charge for the Bakersfield reorganization among the special items. Earnings before special items were $3 million, down 98% from the like period a year ago. The company is reducing capital spending and operating costs throughout the company, said Ray R. Irani, Occidental chairman and chief executive.

Advertisement
Los Angeles Times Articles
|
|
|