The axing of 27,000 jobs at China Petroleum & Chemical (Sinopec) has cost the company 1.3 billion yuan (about HK$1.21 billion) in compensation payouts, 30 per cent more than forecast. China's second-largest oil and petrochemicals company said in April it would reduce its workforce by 27,000 this year at a cost of 1.02 billion yuan. Announcing its interim results yesterday, the oil giant said its first-half profit surged 27.5 per cent to 9.68 billion yuan. A Sinopec spokesman would not comment on the reasons for the discrepancy between the actual and estimated cost of the dismissal compensation payouts. But an explanation is expected today when company executives meet analysts and the press. This year's staff cuts are part of the company's five-year plan beginning this year to cut about 20 per cent of its workforce, or 100,000 employees. The staff cuts are expected to cost a total of 4.5 billion yuan in payouts, but to ultimately save the company 5.4 billion yuan over five years. The 100,000 staff reduction programme includes cuts at Sinopec's listed subsidiaries. Sinopec Zhenhai Refining and Chemical said it would reduce its staff by 20 per cent in five years beginning this year. Zhenhai chairman Sun Weijun said the company had cut 357 employees in the first half of this year and more redundancies from its 10,034 staff were expected in the coming months. Speaking at the company's after-results briefing, Mr Sun said redundancy expenses during the period amounted to 39 million yuan. The company reported a 92.3 per cent jump in its six-month interim profit to 293.9 million yuan. Mr Sun said the reduction in labour costs would mean the company recovered the compensation expenses within three years. He also unveiled plans to spend 2.4 billion yuan to boost crude-oil comprehensive processing capacity from 14 million tonnes to 20 million tonnes a year from 2003. Previously it had been planned to increase capacity to 16 million tonnes a year by 2003. Polyester-maker Sinopec Yizheng Chemical Fibre said that at June 30 this year, it had shed 300-400 employees through voluntary resignation. Chairman Fu Xingtang said it was estimated that the company had to pay out about 32 million yuan under the plan. He declined to unveil the staff-cut target in the second half, but said it would be in line with the parent's 27,000 overall target. The company announced a 68 per cent drop in first-half profits to 121 million yuan and plans to spend 1.8 billion yuan for business development next year. Some 900 of Sinopec Shanghai Petrochemical's employees retired voluntarily in the first half, costing the company compensation expenses totalling 77.3 million yuan. Sinopec Beijing Yanhua Petrochemical shed 173 of its 13,000 staff through natural attrition and business restructuring in the first half, at a total cost of 18.43 million yuan. Michael Zhou, director of the secretarial office of the board, said the total compensation cost was relatively high because most of the staff who left were senior, and were paid 3,000 to 4,000 yuan for each year of service. The company has hired London-based Cambridge Management Consulting to help it cut costs by streamlining materials procurement, production and logistics operations. Both companies - Beijing Yanhua and Shanghai Petrochemical - would not comment on any further staff cuts planned for the second-half.