BP Amoco to cut more jobs than predicted
British Petroleum (BP) and Amoco of the United States are set to cut jobs by far more than the 6,000 previously forecast, following completion of their merger. The merger has created Britain's biggest company and one of the largest oil concerns in the world.
The company would not give a new figure for the redundancies, but it said the worsening operating environment since August, when the link was announced, required heavier cuts than had been planned. BP, whose chairman is former EU Commissioner Mr Peter Sutherland, has bought Amoco for some $55 billion (£37 billion). The new company will trade as BP Amoco and will have a market capitalisation of more than $140 billion.
The effects of the overlap between the two groups will be most pronounced in the US, although Britain will also be hit by job cuts. The first round of redundancies in the joint workforce of about 100,000 is expected to be announced next week. The extent of the enlarged programme is due to be known by the end of the first quarter.
The weakness in oil and commodity chemical prices will add urgency to the shake-up of the group by chief executive Sir John Browne. He will announce performance targets in June or July, and his eventual aim is to cut costs by 30 per cent. Trading in BP Amoco shares in London and BP Amoco American depositary receipts on the New York, Pacific, Chicago and Toronto stock exchanges begins on Monday.