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Staff slicing.

As predictions of oil-company downsizing come true, Alaskans are weighing the impacts on their businesses. BP Exploration (Alaska) and Alyeska Pipeline Service Co. each expect to cut roughly 400 employees from their work forces over the next three years. The job losses from the two oil concerns, added to the loss of 250 positions at Arco (Alaska) last year, will bring the total number of employees laid off in Alaska's oil industry from 1991 to 1995 to more than 1,000.

For BP, which currently employs nearly 1,600 staff and contract employees, the layoffs will represent more than 25 percent of its work force. About 170 positions are to be eliminated this year. In a further cost-cutting measure, the premium paid to Alaska workers as cost-of-living compensation will be reduced from 30 percent to 20 percent.

Many of BP's reductions are expected to be achieved through a voluntary separation plan that includes severance pay and other benefits. Company officials hope to further minimize the need for involuntary layoffs through careful staff resource planning, retirements and transfers to other positions within BP, both in Alaska and elsewhere.

Paul Laird, associate director of public affairs for BP, says, "At this point, we're offering voluntary separations across the board for everybody in Alaska. In early June, we will have determined if voluntary separations have met the levels needed or if forced layoffs are required. Nobody who asks for separation will be refused."

According to Laird, BP hasn't given up on Alaska and plans two or three exploratory wells this year from existing pads on the central North Slope. He also notes that by controlling costs, BP plans to remain in Alaska for several more decades.

BP has transferred about two dozen workers to an oilfield in Colombia it is delineating. Laird says, "This year, despite the promise of the Colombia field, we expect to spend more than seven times more money here in Alaska than in Colombia. This is by no means a mass exodus of investment capital from the state."

Other steps already taken to improve efficiency and reduce costs at BP include a shared-services initiative with Arco Alaska to streamline Prudhoe Bay operations; closer working relationships with Alaskan contractors to reduce costs and improve performance; more use of contractors for office, administrative and data-processing support; and evaluations to distinguish vital functions.

Marnie Isaacs, manager of media relations for Alyeska Pipeline Service Co., says, "We are just at the beginning of our planning process. We're on a different schedule than BP, and the 400 employees is only a rough target." The firm, which currently employs about 1,725 people, expects to meet its manpower reduction goals by the end of 1995. The pipeline operator and distribution company is owned by a consortium of seven oil companies, including BP.

Alyeska, which has been doing business for 15 years, also hopes to pare down its labor force through retirement and attrition. Isaacs points out that employees more than 55 years old are eligible for retirement after 15 years of service. "We have a lot of employees who have been with us since start-up, and in the coming year we will have a higher-than-usual number of retirements," she says.

Some operations -- such as maintenance and environmental work -- do not change with declining amounts of oil going through the pipeline, Isaacs notes. But Alyeska management is considering reductions in the number of pump stations and may need one less berth at the terminal in Valdez. "We need to look at a lot of personnel and operational factors," she says.
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Title Annotation:effects of oil companies' downsizing considered
Publication:Alaska Business Monthly
Date:Jun 1, 1992
Previous Article:Victor Riley: keeper of the keys.
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