World's biggest steel maker to cut 9,000 jobs

ArcelorMittal, the world's biggest steelmaker, will offer voluntary "separation" programs as part of an effort to trim as many as 9,000 employees — three per cent of its global workforce.

ArcelorMittal, whose holdings include Dofasco of Hamilton, said Thursday the focus of the downsizing "is primarily on non-production employees," particularly in selling, general and administrative functions.

Luxembourg-based ArcelorMittal said the move is part of an bid to reduce spending by $1 billion US a year "in response to the current economic situation."

Thursday's statement offered no details of the impact on specific operations of ArcelorMittal, which employs 326,000 people in more than 60 countries and had 2007 sales of $105.2 billion.

ArcelorMittal, which claims to produce about one-tenth of the world's steel, has already slashed global production by one-third, cutting output at Dofasco by 40 per cent through at least the rest of this year.

The Hamilton plant will shut down for two weeks over the coming holidays, requiring 5,000 workers to take unpaid time off.

Slumping sector

ArcelorMittal's job cuts are a sign of the suddenly diminished prospects for the global steel sector.

A few months ago, companies were enjoying their best financial times in 60 years. Now, cutbacks in jobs and production are common with only worse economic news on the horizon.

Some analysts expect companies to cut output by 15 per cent within the next 15 months.

ArcelorMittal says it cut its fourth-quarter output by nine million tons from 29 million tons produced in the previous three months.

Baosteel, China's largest steelmaker, says it will cut one million tons of production within the next three months. Japan's Nippon Steel Corp., the world's No. 2 producer, will chop its output by the same one million tons but by this March, the company said.

Experts say the sector's soaring fortunes were driven by a rising steel appetite in China. As demand for goods from the Asian economic giant fell off in August and September, however, so did the need for steel by China.

Falling product prices are one sign of the sector's slumping economic conditions.

The value of scrap steel, used by mills and considered to be a market indicator, plummeted to approximately $90 US a gross ton after touching a hefty $550 in July.

Hot-rolled steel, a premium product used in cars and office furniture, dropped to $785 a ton, down 27 per cent from $1,080 in July.

With files from the Canadian Press