Tuesday, January 21, 2020

Oxy Slashing Jobs 'Significantly'

January 9, 2020

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Occidental Petroleum Corp said on Wednesday it would begin dismissing workers in a new cost-cutting move following its $38 billion acquisition of Anadarko Petroleum (APC).

The company has already "significantly" cut staff through a voluntary program, spokeswoman Melissa Schoeb said in an email. She did not respond to requests for information about the number of employees to be cut or any potential charge to earnings.

The combined company had about 16,000 workers when it merged.

Occidental has been selling assets and cutting costs since it outbid Chevron Corp last year for Anadarko, quadrupling its debt to $40 billion. In November it said it planned to slash spending by about $3.6 billion this year, or by 40% of the 2019 total, and trim production goals to meet dividend and debt payments.

It reported a third-quarter net loss of $912 million compared with a profit of $1.87 billion the year prior. The loss included nearly $1.3 billion in pretax acquisition costs and impairment charges.

On Monday it said it would cut its majority stake in pipeline operator Western Midstream Partners LP to less than 50% this year, which would reduce the debt Occidental shows on its books and make it easier to sell or spin off the business.

Occidental had long-term debt of $47.6 billion at the end of September.

"Occidental's integration team identified the jobs we need to successfully and safely operate our business and achieve our synergy goals," Schoeb said.

Layoffs could happen this week, the Houston Chronicle reported on Wednesday, citing an internal email from Chief Executive Vicki Hollub. Employees in Occidental Chemical and Gulf of Mexico business units would be exempt from the dismissals, according to the newspaper.

Hollub still faces a proxy battle by activist investor Carl Icahn, who wants to replace the company's board and have it accelerate asset sales or put itself on the market.

Occidental has raised about $10 billion so far through sales of properties including a liquefied natural gas project in Mozambique and production in Africa. It recently agreed to sell Anadarko's former headquarters and a Houston office complex for $565 million to real estate developer Howard Hughes Corp.


(Reporting by Jennifer Hiller; Editing by Richard Chang and Leslie Adler)

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