Alcoa to cut jobs due to mixed quarterly results
US aluminium giant Alcoa posted mixed quarterly results Monday, as commodities prices dragged on sales ahead of a planned company split. Alcoa also announced that it will be cutting as many as 2,000 jobs.
Net income for the quarter ending March 31 was $16m, down 92% from the same time last year. Revenues dropped 15% to $4.9 billion.
Alcoa’s results were hit by a 40% drop in alumna prices and a 26% decline in aluminium prices.
Prices of industrial commodities have been in retreat due to slowing demand from China and other emerging economies. Those effects were partly offset by $364m in cost cuts.
Alcoa also continued to curtail low-efficiency industrial operations, including shutting down a smelter in Indiana and curtailing some refining capacity in Texas.
Alcoa said it had already cut 400 jobs and settled on plans to eliminate another 600. Alcoa is also “evaluating another reduction of up to 1,000 positions,” citing tough market conditions.
Its chief executive Klaus Kleinfeld said plans remain on track to divide the company in two, with one division specialising in commodity products and another on value-added products for the aerospace and auto industries.
Alcoa trimmed its forecast for aerospace, projecting 6-8% global growth in 2016, down from 8-9% previously expected.
But it said long-term demand remains strong in the sector.
“Powerful trends continue to drive long-term market strength” for commercial jet airframes and jet engines, Alcoa said.
In automotive, Alcoa said it continues to see global growth of 1-4%, with 1-5% growth in North America.
