Alcoa to cut 13% of its work force

PITTSBURGH -- — Alcoa Inc., the world’s third-largest aluminum maker, said Tuesday that it would cut 13,500 jobs, or 13% of its workforce, and slash spending and output to cope with the global economic slowdown.

The company based here also said 1,700 contractors would be cut as part of a broad-based plan to reduce costs that includes the planned sale of four business units and a global salary and hiring freeze.

As a result of its actions, Alcoa expects total fourth-quarter charges of $900 million to $950 million. The company plans to report quarterly results Monday. Alcoa also said the moves were expected to save the company about $450 million annually before taxes.

“These are extraordinary times, requiring speed and decisiveness to address the current economic downturn,” Klaus Kleinfeld, Alcoa’s president and chief executive, said in a statement.

The news comes after Alcoa announced production reductions last fall. On Tuesday, it said it would further limit smelting by more than 135,000 metric tons a year, lowering total aluminum output by more than 750,000 metric tons, or 18%, annually.

Production of alumina, a material used to make aluminum, will be reduced to 1.5 million metric tons a year in response to market conditions, the company said.

The production cuts are expected to be completed by April.

Alcoa also said it would seek to lower costs for energy and raw materials such as caustic soda and aluminum fluoride.

Shares of Alcoa rose 26 cents, or 2.2%, to $12.12.