Mining giant Rio Tinto to cut 14,000 staff

(CNN) -- British-based mining giant Rio Tinto announced plans to cut 14,000 jobs on Wednesday, just weeks after a planned buyout by rival BHP Billiton collapsed.

Rio Tinto made the announcement as part of a plan to cut its nearly $39 billion in corporate debt by an estimated $10 billion by the end of 2009. The company issued a gloomy forecast in October.

"Since that time, demand conditions have worsened further, and as a result the group's priorities have reoriented around conserving cash flow and reducing near-term borrowings," it said in a statement announcing the cuts.

The layoffs would include 5,500 direct employees and 8,500 contract jobs, the elimination of which would save about $1.2 billion a year, the company said. The layoffs would cost $400 million in severance packages, however.

BHP withdrew from its planned buyout in late November, citing a high level of debt the combined company would be required to service in "difficult" economic conditions and concerns about whether it would be able to sell off units Rio Tinto already had targeted for divestment.

Rio Tinto said it would consider selling off other elements of the company in an effort to raise more cash, but disclosed no details.