Mar. 13--Sunoco Inc. announced today that it will eliminate 20 percent of its salaried workforce as part of a broad effort to remain competitive during a downturn in its oil refining and chemical manufacturing businesses.

Most of the 750 job losses will occur in the Philadelphia region, where the company has its headquarters and three refineries, Sunoco's chairman and chief executive officer, Lynn Elsenhans, said in an interview this morning.

Cutting employees loose is a "difficult thing to do," but it has to be done for the long-term health of the company, Elsenhans said.

In addition to this workforce reduction, Sunoco is also searching for ways to reduce what it spends on energy, materials, equipment and contractors.

Altogether, Sunoco said it expected to reduce costs this year by $300 million on an annualized basis.

The company said it expected to set aside $60 million to $70 million, before taxes, in the first quarter to pay for the layoffs, some of which were voluntary.

Separately, Sunoco plans to offer buyouts to hourly refinery workers, Elsenhans said.

Sunoco had about 13,600 employees overall, including 1,200 at Sunoco Logistics, a spin-off that is still closely tied to the company. Most of Sunoco's 3,700 salaried employees are in the Philadelphia area.

Elsenhans said she did not know how many jobs would be lost at the company's Market Street headquarters.

Today's announcement ended years of relative stability at Sunoco, which employs 4,900 in the Philadelphia region, including 700 at convenience stores.

"It is never easy to take steps that impact the lives of employees and their families," Elsenhans said today in a release.

"While the company has enjoyed several years of strong financial performance, we are now facing a different -- and more difficult -- economic reality. Like many other companies across a variety of industries, Sunoco is taking steps to remain competitive."

From the mid-1980s to the mid-1990s, Sunoco went through several restructurings as it transformed itself from a 1960s-style industrial conglomerate centered on a large oil producer and refiner into a firm dependent on refining for most of its profits.

Like other oil refiners, Sunoco flourished from 2003 through 2006. Profits soared, propelled by strong demand for gasoline, diesel and other fuels coupled with little excess capacity at the nation's oil refineries.

After losing $47 million in 2002, Sunoco saw its profits shoot to a peak of nearly $1 billion in 2005 and 2006. Its stock price rocketed from less than $20 per share in early 2003 to its peak of $96.21 three years later.

Since then, annual profits have fallen for two straight years and the stock price has bounced around between $20 and $50 per share.

Shortly after the market opened this morning, shares were down 89 cents (3 percent) to $28.22.

Elsenhans, who succeeded John G. Drosdick in August, said in December that the company had begun a cost-cutting push that was "not in response to the downturn," but rather an effort to get the company's costs out of the average range and into the top quartile.

Contact staff writer Harold Brubaker at 215-854-4651 or hbrubaker@phillynews.com.

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