Alcoa cuts 13 percent of its workforce

US aluminium-maker Alcoa will cut 13 percent of its workforce, sell four of its non-core businesses, and impose a global salary and hiring freeze due to the economic slowdown.┬á "These are extraordinary times, requiring speed and decisiveness to address the current economic downturn," said Klaus Kleinfeld, AlcoaÔÇÖs president.┬á As part of the plan, Alcoa said it would sell off its electrical and electronic systems, global foil, cast car wheels, and European transport products businesses. With combined revenues of $1.8 billion in 2008, these subsidiaries employ a total of 22,600 people.┬á These cost-cutting measures and job losses add on to savings that were announced in October, after Alcoa saw a 52 percent decrease in third-quarter profit because of sharply decreasing aluminium prices. The Pittsburgh-based company said it would cut its yearly output of aluminium by 18 percent because of falling demand. ┬á As a result of its actions, Alcoa anticipates total fourth-quarter charges of up to $950 million, and annual savings of about $450 million. ┬á The production cuts are expected to be completed by the end of March, but some analysts doubt whether they will help stabilize falling aluminium prices, which fell to roughly 65 cents per pound a few weeks ago from $1.50 a pound last July. ┬á "The problem is a lack of demand,ÔÇØ said Charles Bradford of Bradford Research/ Soleil Securities. ÔÇ£With the lower price, Alcoa has got to try to bring its costs down. There is no way they can make money at 65-cent aluminium."