Atlantic Richfield Co. plans to lay off workers and slash its operating budget in an austerity program forced by low world oil prices and increased competition from larger companies.
In a message sent by e-mail to employees Friday, Arco chairman and chief executive Mike Bowlin did not say how many jobs will be eliminated, or how deeply spending will be reduced. A company spokesman said details of the plan still are being worked out and won't be completed until mid- or late October.Arco has to cut back to compete against companies such as British Petroleum, which recently acquired Amoco, Bowlin wrote.
"It is clear that we must take action to ensure that Arco remains a strong and successful independent company," he said. "To me, the answer is simple and straightforward: We must live within our means."
"We must reduce costs across the board - administrative, overhead, operating and capital costs."
The company does not plan to close any gasoline stations or AM-PM markets, said spokesman Al Greenstein.
Arco is the nation's seventh-largest oil company and employs about 20,000 people worldwide.
Crude oil prices have rebounded in recent weeks, reaching $16 per barrel after falling as low as $12 per barrel earlier this year. But last year, before the Asian economic crisis cut demand, oil futures were 20 percent higher.
The price revival was attributed to production cuts by OPEC countries and aggressive buying by speculators who expect demand to increase as winter approaches.