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Natural gas

Mobil Corporation Announces Major Restructuring Effort

Strategic Insights

— 1 min read

Mobil Corporation, a leading oil and gas company, is undergoing a significant restructuring effort aimed at improving efficiency and competitiveness. The company's Chairman, Lucio A. Noto, announced a major overhaul of the company's worldwide staff support services, which will result in a reduction of approximately 4,000 employees from the current 14,500 staff support employees worldwide. The restructuring is expected to lead to annual pre-tax savings of around $750 million compared to the 1994 levels.

Key Takeaways:

  • The restructuring will result in a reduction of approximately 4,000 employees from the current 14,500 staff support employees worldwide.
  • The changes will lead to annual pre-tax savings of around $750 million compared to the 1994 levels.
  • In addition to the staff support services restructuring, Mobil will also eliminate 700 other positions in the U.S. downstream businesses, resulting in an additional pre-tax $300 million in annual savings.
  • The company will take an approximate $300 million after-tax charge to earnings in the second quarter of this year.
  • The restructuring is expected to be substantially completed by the end of the first quarter of 1996, with savings expected to begin in the first quarter of 1996 and build to the indicated annualized levels by the end of 1996.
  • The company plans to create a small corporate center to support the Board of Directors and Executive Committee, while most staff employees will be organized into shared services strategically located to reflect the geography of Mobil's businesses.
  • The company has identified significant efficiencies through the redesign project initiated in October 1994, which has led to the stated savings opportunities.

Statistics:

  • 14,500: current number of staff support employees worldwide
  • 4,000: number of employees to be reduced from staff support services
  • 51,000: worldwide regular workforce in 1995
  • 4,700: total reduction in global workforce
  • $750 million: annual pre-tax savings expected from staff support services restructuring
  • $300 million: additional pre-tax savings from eliminating 700 positions in U.S. downstream businesses
  • $300 million: after-tax charge to earnings in the second quarter of this year
  • 1994: baseline year for savings calculations

Sources:

  • "Mobil Corporation Announces Restructuring Plan", PRNewswire, May 1, 1995
  • HISTORY SINCE 1991: Restructuring charges (primarily headcount reductions)
  • CONTACT: John Lord or Gail Campbell Woolley of Mobil, 703-846-2500

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