March 13, 2009 (FinancialWire) -- Sunoco, Inc. (NYSE: SUN) said that it will reduce its salaried workforce by around 750 positions in 2009, which represents about twenty percent of the workforce included in the first phase of the company's Business Improvement Initiative.

The first phase of the review included all business and operations support functions, as well as operations at the company's Philadelphia and Marcus Hook refineries. The company plans to offer hourly employees in certain identified areas the opportunity to resign and receive severance.

Sunoco said it expects to reduce costs by more than $300 million on an annualized basis by year-end 2009. In addition to the current workforce reduction, Sunoco said it expects to derive "significant savings" in energy costs, and the use of materials, equipment and contractor services.

In connection with the first phase of the initiative, Sunoco said it expects to establish a pretax accrual ranging from $60 million to $70 million in the first quarter of 2009. Of this amount, around $45 million to $50 million pertains to employee severance and related cash costs.

The amounts identified above do not include any costs related to hourly employees. As a result of the workforce reduction, the company may also incur noncash settlement losses in its defined benefit pension plans during 2009.

Philadelphia-based Sunoco is a manufacturer and marketer of petroleum and petrochemical products. The company has 910,000 barrels per day of refining capacity, around 4,700 retail sites selling gasoline and convenience items, around 6,000 miles of crude oil and refined product owned and operated pipelines and 43 product terminals.

Sunoco is a also manufacturer of petrochemicals with annual sales of around five billion pounds, largely chemical intermediates used to make fibers, plastics, film and resins. Sunoco's cokemaking facilities in the United States have the capacity to manufacture over three million tons annually of metallurgical-grade coke for use in the steel industry.

Sunoco is also the operator of, and has an equity interest in, a 1.7 million tons-per-year cokemaking facility in Vitoria, Brazil.

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