Arco Chemical Co. plans to save $150 million a year by eliminating 800 to 1,100 jobs by 1999, a reduction of roughly 20 percent of the firm's global work force.
The move comes six months after the Newton Square, Pa.-based outfit approved a $2.6 billion worldwide expansion which will add 1.65 billion pounds of styrene capacity by 2001.
Arco officials said the job cuts are part of a broad initiative to add shareholder value and reach a double-digit reduction in the $750 million the firm spends each year on fixed and controlled costs.
Officials added that the job reductions will not affect expansion plans, and will be divided up geographically among the company's 5,300 employees—3,000 of whom are in the United States. Arco operates 32 plants, sales offices and research centers worldwide.
``Our program of cost reduction can be done at the same time we continue to grow the company and is consistent with our efforts to serve our customers,'' Arco Chief Executive Officer Alan Hirsig said in a news release.
``We're trying to develop a new cost structure to be more competitive in the future,'' said Arco spokeswoman Sallie Anderson. ``We can eliminate unnecessary work and do things smarter and with less bureaucracy.''
Arco, which claims to be the world's largest producer of propylene oxide, is also a key supplier of styrene monomer, among other products.
The 31-year-old company's expansion plans, announced in December, focused on a major styrene, propylene oxide and butanediol project in Rotterdam, the Netherlands, and a smaller styrene and propylene oxide boost in Channelview, Texas.
Arco's 1996 sales figure of $3.96 billion represented a drop of nearly 8 percent from the previous year.
The company also sold its polystyrene business to Nova Chemicals Inc. late last year.