Rio Tinto To Cut 14,000 Jobs In Cost Cutting Initiative

December 10, 2008 1:06 p.m. EST

Syndey, Australia (AHN) - Rio Tinto Group announced Wednesday it will cut global headcount by 14,000 as it aims to cut cost and reduce debt by $6.6 billion come 2010.

The move will affect 12.5 percent of Rio's workforce with 8,500 contractors being cut and 5,500 employees losing jobs. Cuts will be spread across the company's global operations.

The job cuts are just a piece of the company's plan to cut operating expenses by $1.6 billion by 2010.

"Given the difficult and uncertain economic conditions, and the unprecedented rate of deterioration of our markets, our imperative is to maximise cash generation and pay down debt," said CEO Tom Albanese in a company statement.

"We will minimise our operating and capital costs to appropriately low levels until we see credible and meaningful signs of a recovery in our markets, but will retain our strategic growth options," he said.

Rio Tinto also plans to hold its dividend steady in 2008 and 2009, stopping its regular 20 cent a year increase.

The company said it will attempt to sell assets that were not previously up for sale in order to help pay down debt and reach its $6.6 billion reduction goal.

Shares of Rio Tinto are up 26 percent to $92.30 in mid-day trading.