Alyeska to cut workers, spending due to flat oil production

Posted: Friday, January 25, 2002

ANCHORAGE - The Alyeska Pipeline Service Co. is laying off workers and cutting spending.

Company officials announced Thursday they will lay off an unknown number of Alyeska's 1,025 employees this year as it reorganizes amid flat North Slope oil production.

The oil consortium also said it plans to spend $520 million this year, about $10 million less than last year.

Alyeska has been looking at ways to be more efficient and found it can reduce its work force while still safely running the 800-mile trans-Alaska pipeline and Valdez tanker port, said Dan Hisey, Alyeska's chief operating officer.

During the next three to four months, Alyeska will decide how many jobs it will cut. The layoffs could hit managers and supervisors, engineers and business analysts, office workers and administrators, he said.

Maintenance and other front-line workers won't be affected, Hisey said.

"We will not diminish in any way our focus on pipeline integrity, safety and maintenance," Hisey said.

Anchorage-based Alyeska, a consortium owned by six major oil companies, has about 240 staff and contract workers in Anchorage, with the rest mainly in Fairbanks, Valdez and along the pipeline.

Alyeska's announcement Thursday follows BP's announcement was laying off about 200 workers and cutting costs.

BP holds the largest ownership stake in Alyeska at nearly 47 percent.

Alyeska employees learned last week of the pending layoffs. Whether the cuts will affect a few or hundreds of workers remains unclear. Alyeska also doesn't know how much it will save from the layoffs, Hisey said.

What is certain is the next few months will be hard on workers as they await their fate.

"When you start talking about (job cuts), people become stressed," Hisey said. "So we want to move through this as quickly as possible."

The last major Alyeska layoffs were in 1997, when former president Bob Malone ordered a massive reorganization that moved hundreds of employee and contractor jobs from Anchorage to Fairbanks and Valdez. About 480 workers lost their jobs during the 1997 reshuffling.

Hisey said Alyeska has looked at ways to control costs, in part, because of lower production levels.

"This is about streamlining and simplifying our organization," he said.

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