ChevonTexaco Corp will eliminate nearly 500 more jobs than management anticipated as part of the newly merged oil giant's effort to save an additional US$600 million annually in its combined operations.
Under the more aggressive cost-cutting program announced Monday, the San Francisco-based company will eliminate 4,500 jobs, or about 8 percent of its work force, instead of the 4,000 layoffs envisioned in October 2000 when Chevron announced its plans to buy Texaco for US$39 billion.
The extra job cuts are being made as ChevronTexaco raises its estimated cost savings from the merger to US$1.8 billion from management's original estimate of US$1.2 billion annually. The company expects to trim US$1.2 billion in expenses by July of next year and realize an additional US$600 million in savings by March 2003.
The 500 additional layoffs and other belt-tightening measures will account for US$80 million of the extra savings, according to a presentation for industry analysts in New York.
Overall, the company says it has identified about 700 specific areas where money can be saved and is holding weekly meetings to make sure the expense cuts are proceeding on schedule.
ChevronTexaco's shares fell US$0.54 to close at US$82.91 Monday on the New York Stock Exchange. With oil prices sliding, the company's stock has declined by 9 percent since the Oct. 9 consummation of the marriage.
ChevronTexaco will incur about US$1.5 billion in merger expenses.
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