NEW YORK – Alcoa Inc. (AA), following up on pledges to streamline operations and cut costs, on Tuesday set a restructuring that will include 2,000 job cuts and the sale of its stake in a Norwegian metals company.
The restructuring announcement was included in a statement by the world's largest aluminum producer that it was accepting an offer to tender its 46.5 percent stake in Norway's metals group Elkem ASA (search) to Norwegian food-to-media group Orkla ASA (search) for about $870 million in cash, resulting in an after-tax gain of approximately $180 million.
Pittsburgh-based Alcoa said it would use the proceeds of the sale to pay down debt, fund capital expansions and restructure expenses.
"The elimination of jobs is always a difficult decision and one that is not taken lightly, but in order to put our company in the best competitive position and properly serve our global customers, they are necessary," said Chairman and Chief Executive Officer Alain Belda.
Wall Street, which had been anticipating a restructuring, was relatively impassive to the announcement. Alcoa's stock was down 26 cents at $31.20 on the New York Stock Exchange (search).
In January, Alcoa said it was exploring streamlining its operations as a result of the company's new global business structure. The company had anticipated that restructuring activities and plans would be finalized during the first half of the year.
It said on Tuesday it expects to incur after-tax restructuring charges of between $20 and $25 million for the first quarter, based on the specific plans identified to date in North American, European, and South American locations.
Those plans call for the reduction of approximately 2,000 positions and will be completed over the next 12 months, it said, without specifying where the job cuts will come.
The company anticipates annualized savings of approximately $45 million from its actions.
For the second quarter, Alcoa said additional charges are contemplated as further restructuring initiatives are solidified. The company said it expects these restructuring charges to be less than the net after-tax effect of the Elkem transaction.
The restructuring does not affect the company's recently acquired facilities in Samara and Belaya Kalitva in Russia, it said.