Oil prices aren't what they were in the early 1980s, but oil companies, top-heavy with infrastructure and vertically diversified operations, still are. Now, some of the biggest are cutting back. On July 5, Texaco announced a $300 million plan to sell or swap half of its 600 U.S. oil fields, eliminate management layers in its refining and marketing units, and reduce its 32,000-employee workforce by 8%. Texaco will take a $165 million charge in the second quarter to reflect the layoffs and the write-down of certain assets; $50 million of that will cover the $1 billion April sale of its chemicals business. The gamble: that big investments in Russia and China will pay off.
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