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Kerr-McGee Expects to Save $45 Million Through Employee Cuts
Kerr-McGee Corp. has announced it will cut its U.S. non-union workforce by 7-9% or up to 250 employees in order to reduce costs. The job reductions and a plan to mitigate $15 million of future annual medical and pension expenses is expected to add up to about $45 million in savings.
“Competition is intense in both of our core operating businesses,” said Luke R. Corbett, Kerr-McGee chairman. “As economic pressures continue and the global economy recovers more slowly, we must look for ways to reduce our current operating costs and offset future increases in other areas.”
The company expects to reduce its workforce through early retirement and involuntary severance and separation programs, which will be completed by the end of 2003.
In an end of August briefing, company officials said natural gas and oil production for the third quarter were continuing on target with gas in the range of 670-755 MMcf/d, 85% of it in the U.S. Oil production is expected to be between 134,000 and 150,000 b/d.
Total oil and gas production for the year is expected to average 270,000 b/d of oil equivalent. However, following on the briefing at least one analyst questioned Kerr-McGee’s cost level.
The company said Tuesday it expects to take a charge in the fourth quarter of 2003 of approximately $40 million after-tax related to the cost reduction plan.
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