Sunoco Inc. is cutting costs by more than $300 million this year by reducing its salaried work force and use of energy, materials, equipment and contractors, the gas and chemical company said Friday.
The Philadelphia-based company said it will cut its work force by about 20 percent, or 750 jobs this year. The reductions are part of the first phase of an initiative reviewing all businesses and operations supports and the Philadelphia and Marcus Hook, Pa., refineries.
Sunoco (nyse: SUN - news - people ) said it expects to establish a pretax accrual of between $60 million and $70 million, or $35 million to $40 million after tax, in the first quarter in connection with the first phase of the initiative.
Of this amount, about $45 million to $50 million, or $25 million to $30 million after tax, is related to employee severance and related cash costs to be paid out over one year. The balance will be attributable to a provision for pension and postretirement curtailment losses.
The amounts do not include costs related to hourly employees.
As a result of the work force cuts, Sunoco also may incur settlement losses in its defined benefit pension plans this year. The amount and timing of such losses cannot be estimated, the company said.
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