ChevronTexaco Corp. informed the Securities and Exchange Commission this week that it has started to lay off 7% of its work force, or about 4,000 employees out of a total of 57,000, as part of a program designed to trim $1.2 billion/year in overhead following its merger. The cuts are in line with what the companies expected last year when their merger was first announced.

The move will eliminate overlapping operations in the two oil businesses that were combined in a $39 billion merger last month. Most of the layoffs will be completed by the end of next year. ChevronTexaco will absorb one-time charges to cover severance pay and other expenses associated with the firings.

The company said it would provide additional details about the charges and other future expenses before the end of the year. More information also is expected to be released next week at a meeting with analysts in New York City. Through Oct. 31, the company had spent $230 million on merger-related expenses.

ChevronTexaco shares fell more than $3 on Wednesday to close at $36.62 and then plummeted another $3 Thursday morning as crude oil prices fell below $18/bbl, the lowest price in two years, in reaction to OPEC’s decision to cut oil production only with cooperation from non-cartel producers.

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