US aluminium giant Alcoa will cut 13,500 jobs worldwide, representing 13 percent of its total workforce. The move is expected to save the company $450 million.
AFP - US aluminum giant Alcoa said Tuesday it would slash some 13,500 jobs or 13 percent or its global workforce and reduce output to cope with the global economic downturn.
Alcoa also said it was implementing a freeze on hiring and salaries.
The company said it would make "targeted reductions, curtailments and plant closures and consolidations" to reduce the number of employees by the end of 2009 by 13,500. An additional 1,700 contractor positions also will be eliminated.
"These are extraordinary times, requiring speed and decisiveness to address the current economic downturn, and flexibility and foresight to be prepared for future uncertainties in our markets," said Klaus Kleinfeld, president and chief executive.
Alcoa said in a statement it would cut its primary aluminum output by 18 percent. Alumina production will also be reduced to meet lower market demands.
The company based in Pittsburgh, Pennsylvania, said it would take other steps to trim costs for energy and raw materials, including looking at alternate suppliers.
The moves will require Alcoa to set aside 900 to 950 million dollars in restructuring costs, to be charged against results from the fourth quarter of 2008.
With the actions, the company is expected to save some 450 million dollars before taxes.
"Because we recently completed an extensive competitive analysis, including a strategic review of each business, we have been able to quickly identify and implement effective responses that strengthen our market competitiveness and financial staying power in the economic downturn," Kleinfeld said.
"We will continue to monitor the dynamic market situation to ensure that we adjust capacity to meet any future changes in demand and seize new opportunities that emerge. These are extraordinary times requiring extraordinary actions."
Alcoa also intends to sell off four "non-core" businesses that make electrical and electronic systems; global foil; cast auto wheels; and transportation products in Europe.
These businesses had 2008 combined revenues of 1.8 billion dollars but lost some 105 million dollars. The net proceeds from the sales are expected to be around 100 million dollars. The businesses employ a combined 22,600 people at 38 locations.
Alcoa last month agreed to an equity swap that would boost its stake in Sweden's Elkem Aluminum and make it world's biggest aluminum maker.
Alcoa said it struck a deal with Norweigan Orkla ASA to exchange assets to get 100 percent of the Swedish firm.
Alcoa will receive Orkla's 50 percent stake in Elkem Aluminum while Orkla will receive Alcoa's 45 percent stake in the processing operation of US-based SAPA. The transaction is expected to be completed in the first quarter of 2009.
With the addition, the company would overtake the current world aluminum leader, Rusal of Russia.
Date created : 2009-01-06