Alcoa to Slash More Than 15,000 Jobs

Alcoa to Slash More Than 15,000 Jobs Alcoa to slash more than 15,000 jobs
Editor:   From: miningnews   Click?53   Date: 2009-01-07 10:59:17

ALUMINIUM producer Alcoa has announced it will reduce annual output by 18% and reduce its global workforce by 13% in order to reduce capital expenditure in 2009 by 50%.

By the end of 2009, the company will have reduced its headcount by 13,500, while an additional 1700 contractors are set to lose their jobs.

The US-based company will also put a freeze on salaries and hiring.

Alcoa president and chief executive Klaus Kleinfeld described the actions as aggressive but prudent.

“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,” he said.

By the end of the first quarter of 2009, Alcoa will implement further smelting reductions of more than 135,000 tonnes per annum, taking the total amount of reductions in primary aluminium output to 750,000tpa.

In October, Alcoa announced production cuts of 265,000tpa at its Rockdale smelter in Texas and in November said it would cut production by a further 550,000tpa at its Point Comfort, Texas alumina refinery.

The latest production curtailments will affect Alcoa’s Tennessee operations.

Alcoa is also planning to divest four non-core downstream businesses: Electrical and Electronic Systems, Global Foil, Cast Auto Wheels and Transportation Products Europe.

The company expects to achieve net proceeds for the sales of around $US100 million ($A138 million).

Non-critical capital expenditure will be cut to $US1.8 billion, a 50% reduction from 2008.

The Sao Luis refinery expansion and Juruti bauxite mine, both in Brazil, will not be affected, with the company to spend around $US750 million to complete the projects during the first half of 2009.

In November, Alcoa suspended proposed expansion work on the Wagerup aluminium refinery in Western Australia.

In other cost-cutting measures, Alcoa has finalised new power agreements for its Canadian operations and will secure raw materials from alternate suppliers to slash input costs.

Alcoa expects the restructure and divestments to save around $US450 million annually before taxes.

In Australia, the company employs 6280 people plus around 1500 contractors, most of whom are in Western Australia.

It is unknown whether the actions will affect Australian jobs.

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