"Rio Tinto" lays off 14.000 employees

"Rio Tinto Group", the world"s third largest company, will cut 14.000 jobs and will cut its expenses by 5 billion dollars, in 2009, as the world recession has reduced demand for metals.

"Rio" wants to cut its 38,9 billion dollars corporate debt by 10 billion dollars by the end of 2009, and wants to sell off significant assets, according to the press release issued by the company yesterday.

The above-mentioned number of layoffs represents 13% of the company"s 112.000 employee workforce. The layoffs will help the company save 1,2 billion dollars a year, stated the company"s officials.

Rio Tinto"s officials further added: "Demand conditions have worsened further, and as a result the group"s priorities have become conserving cash flow and reducing near-term borrowings. The impact of the crisis will be felt in the company"s foreign projects. Some will be cancelled, and others will be put on hold until the moment the market recovers".

The company could put off new projects and expansion plans worth 32 billion dollars, next year, amid a drop in demand for metals, "Credit Suisse Group" analysts say.

Rio Tint"s chief executive, Tom Albanese, stated that the company would not issue shares and has abandoned the plan to increase dividends. The company plans to reduce operating expenses by 2,5 billion dollars starting in 2010.

Last month, "BHP Billiton" Ltd., the world"s largest mining company, withdrew from its 66 billion dollar planned hostile takeover of "Rio Tinto", due to the credit market freeze and the drastic decline in demand for raw materials.

BHP launched the takeover bid in 2007, and at that time, the company"s market value was 140 billion dollars (based on the share value). Had the deal gone through, it would have been the world"s second largest in corporate history, after the takeover of the German company "Mannesmann" AG by the British mobile telephony operator "Vodafone" Plc, in 2000.