Alcoa cutting 6,500 jobs

November 19, 2001 Posted: 1740 GMT

NEW YORK (CNN/Money) -- Shares of Alcoa Inc. were higher at midday Monday after the company said it will cut 6,500 jobs, or nearly 5 percent of its work force.

The world's largest aluminum producer cited the need to make its sprawling manufacturing operations more efficient amid low metal prices and weak demand.

A spokesman for Alcoa (AA: up $1.02 to $38.14, Research, Estimates) told CNNfn the layoffs, which will occur in various positions throughout the company, will be phased in and completed by the end of 2002.

Alcoa, whose earnings this year are expected to trail last year's, said the cuts will affect plants and workers at 40 locations in the Americas and Europe.

About 20 percent of the layoffs will be announced Monday, including 1,100 in Europe, as well as some plant closings in the Netherlands, Germany and England, the spokesman said.

"This restructuring is a direct result of the strategic review to optimize Alcoa's manufacturing system after a recent series of acquisitions," the Pittsburgh-based company said.

The company expects to take $200 million to $250 million in charges, with about half related to the "rationalization of assets" and the rest to cover employee severance costs, Alcoa said.

Two weeks ago Alcoa announced a plant closing in Lebanon, Pa., including 240 layoffs.

Further information about plant closings and job cuts will be disclosed over the next year, the spokesman said.