The British-Australian mining giant Rio Tinto, faced with falling ore prices and a global economic slowdown, has decided to cut 14,000 jobs globally to reduce its debt by $10 billion, the company announced on Wednesday.
Of this, 8,500 jobs are related to suppliers while the planned 5,500 layoffs pertain to the company’s employees. The company also announced a reduction in consumption and the sale of assets to lower its debt before the end of 2009, thereby better positioning itself to face the speed and intensity of the global financial crisis. "Given the difficult and uncertain economic circumstances and the speed of the deterioration of our markets, our current imperative is to focus maximally on generating cash and repaying debt," said CEO Tom Albanese.
"We will minimize operational and capital costs to appropriate low levels until we begin to see signs of recovery in our markets, but we still plan to retain options for strategic growth," he added. Net capital expenditure for 2009 will be reduced from $9 billion to $4 billion, the global mining giant announced, which until last month was the target of a hostile takeover attempt by BHP Billiton, which has since withdrawn its offer due to the deepening financial crisis and falling commodity prices, as well as Rio Tinto’s excessive debt.
