Exxon Mobil May Cut 3,000 More Jobs
Wednesday, August 2nd 2000, 12:00 am
By: News On 6
DALLAS (AP) â€” Exxon Mobil Corp., which already had planned to slash about 15 percent of its work force by the end of 2002 to realize savings from its merger, now wants to cut 3,000 more jobs.
With the latest announcement, the world's largest publicly traded oil company will reduce its combined work force by 19,000 employees. In a separate move, the Irving, Texas, corporation plans to buy back an unspecified number of its shares.
Annual savings from merging the former Exxon Corp. and Mobil Corp. will exceed the previously estimated $3.8 billion, Exxon Mobil chairman Lee Raymond said Tuesday.
``Our new, leading-edge global organization is in place and already beginning to deliver significant productivity improvements,'' he said in a prepared statement. ``Projected near-term merger synergies of $4.6 billion before tax are 65 percent higher than we originally projected and have grown by 20 percent from the numbers we announced last December.''
When the merger was announced in late 1998, Exxon Mobil had a combined 123,000 employees worldwide. Layoffs began last year.
Last month, the energy company announced that it more than doubled its net income for the second quarter, fueled by continued high oil and gas prices and a healthy global economy.
On Tuesday, company executives met with Wall Street analysts in New York to outline benefits of the merger, which received Federal Trade Commission approval at the end of November.
Despite the $85 billion merger and steep petroleum prices, Exxon Mobil's stock price has risen just 2 percent since the start of this year.
``They have everything going for them except their stock performance,'' Fadel Gheit, an energy analyst at Fahnestock & Co. in New York, told The Dallas Morning News. ``This is probably the best environment that Exxon (has been) operating in for many, many years.''
Exxon Mobil shares dropped 19 cents Tuesday to close at $80.
``A share buyback would serve as a catalyst to revive investor interest in the stock,'' Gheit said.
Exxon, which repurchased 1.2 billion shares between 1983 and 1999, had discontinued the buybacks because of the Mobil merger.
Exxon Mobil officials told analysts that the $4.6 billion savings and other merger windfalls should increase the company's net income by $1.6 billion this year, $1.9 billion in 2001 and $3 billion in 2002.