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The cuts affect 14 salaried employees in various support departments and 14 hourly employees who work in the refinery labor pool.
Poor product demand, combined with a slower-than-expected economic rebound, meant that officials could no longer avoid job cuts, company officials said.
Costs had exceeded the incoming cash flow at the refinery for the past year, said Gerald Faudel, vice president of government relations and environmental affairs for Frontier Oil Corporation.
"This is a very low-margin business," he added. "We don't make much on a gallon of gasoline."
He said he didn't know when the refinery would be able to rehire for the lost positions.
Faudel said it depends on the pace and strength of an economic turnaround.
At the same time, the Cheyenne refinery entered the recession with a larger staff than comparably sized operations, Faudel said. The number of employees dropped from 334 to 306 with Thursday's cuts.
The layoffs also are part of a widespread effort to ensure the future viability of the Cheyenne refinery. He said other cost savings will come from energy conservation and production improvements.
The corporation will continue to invest in equipment to improve the refinery's product yields. The refinery also will remain on track for environmental upgrades, he said.
He said the corporation intends to spend a total of $225 million between 1995 and 2025 on capital construction improvements.
He added that the nationwide demand for gasoline and diesel dropped 3.7 percent over the last year. Gasoline demand took a 1 to 2 percent hit, while diesel demand sunk 10 percent.
But it's a significant impact for a company that offers two products, Faudel said.
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