Aluminum giant Alcoa said on Jan. 6 it would slash some 13,500 jobs or 13% 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 it would cut its primary aluminum output by 18%. Alumina production will also be reduced to meet lower market demands. The company said it would take other steps to trim costs for energy and raw materials, including looking at alternate suppliers.
With the actions, the company is expected to save 4$50 million before taxes.
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 but lost $105 million. The net proceeds from the sales are expected to be around $100 million. 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% of the Swedish firm. Alcoa will receive Orkla's 50% stake in Elkem Aluminum while Orkla will receive Alcoa's 45% stake in the processing operation of US-based SAPA.
With the addition, the company would overtake the current world aluminum leader, Rusal of Russia.
Copyright Agence France-Presse, 2009
