Despite record earnings last year, Coastal Corp. CEO David A.Arledge admitted in January that 1999 would be a “challengingyear.” Coastal began to prepare for that challenge last week bystarting a corporate belt-tightening program that will include awork-force reduction.

The program likely will result in 200-300 fewer staff positionsin a few weeks, said a spokesman. But the job cuts won’t beconfined to upstream production operations or concentrated in anyparticular division. They will be spread throughout the company.

“We’re going to be reducing our costs in terms of overhead andin administrative areas. We’re looking at those costs where we canengage in a little belt-tightening and minimize the number ofpositions we actually have to eliminate,” said Coastal spokesmanTodd Van Fossen. “Many of the 200-300 positions are vacantpositions, but some people will be let go. We don’t have a targetdollar figure [for expense reductions] right now.”

It’s not a huge staff reduction – about 2% of Coastal’s13,200-person work force – compared with those of other explorationand production companies suffering under the current crude oilprice depression. Exxon and Mobil said they plan to chop 9,000 jobsas part of their merger. Other non-merger-related staff reductionsinclude those of Phillips Petroleum, which said it plans to cut1,400 jobs this year to reduce costs and increase available cashflow, ARCO, which plans to let 900 people go by the end of nextyear, and Texaco, which is cutting 1,000 out of 8,000 upstreamemployees. Union Pacific reduced its headquarters staff by 14%, or140 positions in December and expects 600 employees to lose theirjobs following the sale of its midstream assets to Duke Energy.Mitchell Energy completed a work force reduction earlier thismonth, cutting 235 positions, or 21% of total staff.

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