El Paso Energy Corp. announced the completion of its post-mergercorporate structure last week. Through normal attrition, earlyretirement and 607 layoffs, the work force has been pared down from5,500 to 4,575. The action is part of a company-wide plan toimplement the optimal corporate organization for the future, ElPaso said, and the company expects to save in excess of $100million in the first full year after the merger due to thesemeasures.

Staff reductions took place in all of the company’s locationsincluding Houston, El Paso, and Tyler, TX, as well as Birmingham,AL, and Oklahoma City, OK. The reductions occurred across allbusiness units and at all levels of the company. Notifications oflayoffs have already gone out. No other cuts of this magnitude arescheduled.

Of the terminated employees, 246 will remain with the companyuntil their current assignments are completed – some for severalweeks – but none later than June of next year. One of the biggestnames included on the list of people leaving El Paso is RichardOwen Baish, president of El Paso Natural Gas. Baish, who had beenwith El Paso Natural for 27 years, announced he was retiring lastMonday. Patricia Shelton, who is currently vice president, finance,will take over Baish’s position when he leaves Dec. 31. Shelton hasbeen with El Paso for 19 years in various positions.

Employees who were not retained are eligible to receive fullseverance benefits including a cash payment based on years ofservice.

The two companies jumped the final regulatory hurdle last weekwhen El Paso agreed to the FTC’s terms to divest its 100% ownershipin East Tennessee Natural Gas Co., Sonat’s 100% ownership of SeaRobin Pipeline Co., and Sonat’s one-third interest in DestinPipeline Co., L.L.C. following the merger (see NGI, Oct. 25).

The transaction creates a transmission system comprising over40,000 miles, which is the largest system in North America both interms of throughput and miles pipeline. The new El Paso’s pipelinesystems will transport 12.4 Bcf/d-fully one quarter of the gasvolumes in the United States.

The combined company will be headquartered in Houston. Sonat’sheadquarters will remain in Birmingham, AL, and El Paso Natural GasCo. will remain in El Paso, TX. William Wise, previously CEO of ElPaso Energy, will retain his position in the new company. RonaldKuehn, who has been CEO of Sonat, is now the chairman of the boardfor the combined company until Dec. 31, 2000.

John Norris

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