The Chicago-based oil company, the nation’s fifth-largest, said it will eliminate 3,800 jobs in the next 12 months and another 700 by the end of 1996 “to improve efficiencies in support staff.”
The moves will result in a $256 million charge against earnings in the second quarter of this year and a $200 million charge in 1996.
The company projected annual cost savings of $600 million before taxes by the end of 1995 as a result of the moves.
Amoco Corp. warned its employees last March of impending layoffs and an extensive reorganization. In June, another letter said the layoffs would be deep.
H. Laurance Fuller, Amoco chairman and chief executive officer, said the company is removing an entire layer of management.
“Companies that are satisfied with mediocrity are liable in one way or another to get themselves in trouble and maybe disappear,” Fuller said. “That will not happen to Amoco.”
The cuts include about 2,000 support staff, which refers to professionals such as lawyers, accountants and human-resources workers not directly involved in oil and natural gas production, a spokesman said.
Earlier this year, the company eliminated 350 other jobs among its marketing staff.
The Chicago area will absorb 1,300 job cuts, and another 1,000 will be in the Houston area, Fuller said. Another large group of cuts will come from the Atlanta area.
At the end of 1993, Amoco had 46,000 workers, 7,750 in Illinois. In 1992, Amoco cut about 16 percent of its work force-8,500 jobs.
Amoco already has eliminated the company’s three operating units and replaced them with 17 smaller business units.
Layoffs and restructuring plans are nothing new to the oil industry. Chicago-based Amoco is joining Atlantic Richfield, Texaco and Mobil, all of which recently have announced big job cuts.
All the companies blame cutbacks on the same thing: Oil prices are too low, and U.S. laws are making it too difficult to drill for domestic oil.
