Mining company Anglo American PLC said Friday it will cut 19,000 jobs this year and suspend dividend payments after reporting a 29 percent drop in 2008 profits.
The company said it hoped to cut the jobs — 10 percent of its managed work force — through layoffs, natural attrition and scaling back contractor arrangements.
The move comes as market conditions deteriorated dramatically in the second half of 2008, it said. Of the $5.2 billion is made last year, $4.3 billion came in the first half. In 2007 it made $7.3 billion in profit.
“The breadth and severity of the global economic downturn and its impact on growth rates in key sectors and economies are difficult to overstate,” said Chief Executive Cynthia Carroll.
“From global automotive production to construction activity in emerging markets, there was a marked contrast between the first and second halves of 2008, when commodity prices fell sharply. As we begin 2009, the economic outlook remains weak, with limited visibility and we are continuing to experience volatility and downward pressure on commodity prices.”
Anglo American shares were down 6.5 percent at 1156 pence on the London Stock Exchange.
The company had previously announced that it was slashing capital expenditure this year by more than half, to $4.5 billion.
Operating profit in the base metals division — including copper, nickel and zinc — were down 42 percent in 2008, the company said. Base metals contributed 45 percent of Anglo American’s operating profit in 2007.
Operating profit for platinum declined 17 percent,
The ferrous metals division, however, posted a 135 percent gain because of increased sales and higher prices in the early part of the year. Operating profit from coal was up 265 percent, and diamond sales rose 5 percent.