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Arco slashes 900 jobs
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October 15, 1998: 11:44 a.m. ET
Oil company, under pressure by industry downturn, to reduce costs by $500M
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NEW YORK (CNNfn) - Finalizing details of its previously announced plan, Atlantic Richfield Co. said Thursday it will lay off 900 employees and close some offices overseas in a bid to reduce pre-tax costs by more than $500 million over the next two years.
Arco, the nation's seventh-largest oil company, said most of the layoffs will come from administrative and technical jobs at its Los Angeles headquarters and in Plano, Texas.
Those following the company speculate Arco is implementing its plan as a preemptive strike to a hostile takeover.
As part of the cost cutting plan, Arco also will downsize some offices and close 20 others, most of which are located outside the United States
Arco expects to realize $350 million of the cost savings next year.
"Our goal is to provide high returns to our stockholders," Arco Chairman and Chief Executive Mike R. Bowlin said. "To do so, we must achieve best quartile performance in everything we do."
About $330 million of the total cost reductions will come from "upstream" operations, the oil exploration and production part of the business.
In September, Arco said it would reduce its staff of 24,000 employees, but didn't disclose specifics. The company has been plagued by shrinking profit margins as the oil industry faces excess global inventories and historically low crude prices.
Earlier this year, the company sold its domestic coal operations and its interest in Arco Chemical, while acquiring Union Texas Petroleum Co.
Shares of Arco (ARC) were off 7/8 late Thursday morning at 68-1/8 on the New York Stock Exchange. 
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