Wednesday, February 17, 1999 Published at 11:55 GMT
Business: The Company File
Jobs and profits hit at BP Amoco
Oil prices have plunged
Tumbling oil prices have caused profits at industry giant BP Amoco to fall by more than a third, prompting another round of job shedding.
The newly-merged group announced that rationalisation in the wake of the tie-up would see a further 3,000 jobs axed worldwide, taking its jobs reduction target to 10,000 in a bid to save $2bn a year.
The oil giant, which is now the largest industrial company in the UK, announced earnings of $875m in the last three months of 1998, down from $1.4bn in the same period of the previous year.
Chief executive Sir John Browne said the job cuts would be among the company's managerial and clerical staff and would cost the company $1.5bn.
"It is sad and regrettable that we are having to let very good staff go. But putting together two organisations means that we need fewer people and the situation is exacerbated by the continuing low oil price and hostile environment."
The oil industry has been rocked by the collapse in revenues, and companies have been forced to slash jobs to try and save costs.
Crude oil prices are now at there lowest level for decades, at around $10 a barrel.
The group's fourth quarter results include special charges of $351m.
More pain to come
There could be more pain to come across the industry with experts predicting that crude prices are likely to remain in the doldrums for some time.
Oil major Shell announced recently that it had plunged into the red after unveiling huge restructuring costs.
However BP Amoco's results were not as bad as some City analysts had feared and the group's shares picked up after the figures were announced.
By 1500 GMT BP Amoco shares were down 12.5p at 845p.
BP Amoco also warned that margins and revenues would continue to be hit, but said that it expected substantial benefits in 1999 from the merger.
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