BP Amoco aims to cut 4,500 more jobs than expected

No additional cuts in Alaska beyond 400 predicted from acquisition of ARCO; second quarter profits up

Bruce Stanley

AP Business Writer

BP Amoco PLC will cut 4,500 more jobs this year than originally planned, even though its second-quarter operating income rose by 14 percent.

The company laid off 12,500 people by the end of July and said it expects to trim its work force by an additional 2,000 by the end of the year, chief executive John Browne told reporters Aug. 10.

The combined reductions mark an increase from the company’s original plan, outlined in February, to cut 10,000 jobs this year. The planned cuts would leave BP Amoco with 82,500 employees by the year’s end.

None of the additional job cuts are in Alaska, said BP Exploration (Alaska) Inc. spokesman Ronnie Chappell. BP Exploration (Alaska) eliminated 220 staff jobs and 380 contractor positions earlier this year in a restructuring.

When BP Amoco completes its acquisition of Atlantic Richfield Corp. it will mean the loss of about 400 jobs in Alaska, Chappell said. The ARCO acquisition is expected to be completed later this year.

A company official, speaking on condition of anonymity, said many of the remaining job cuts announced Aug. 10 would come in downstream operations such as refining and chemicals, which have suffered pinched profit margins due to higher prices they must pay for oil. The official refused to name the countries where the remaining cuts would be made.

BP Amoco also said Aug. 10 that its operating profit rose to $1.23 billion in the second quarter, compared to last year’s level of $1.08 billion. Operating income in its line of business, exploration and production led the way, surging 54 percent over the year-ago period.

The company, formed by British Petroleum’s purchase last year of Chicago-based Amoco Corp., has realized the financial benefits of its merger sooner than anticipated, chief executive John Browne said. It expects to save $2 billion per year as a result of the union.

The improvement in the company’s upstream sector stemmed largely from higher oil prices, which boosted profits.