CHICAGO Noranda Aluminum Holding Corp. plans to slash about 190 people from its work force, including contract workers, as it looks to cut costs.
The cuts will happen across the company, with most effective before the end of the year, the Franklin, Tenn.-based aluminum producer said Dec. 17.
"While this work force reduction is difficult, it is a necessary part of our commitment to continue to enhance our cost structure and create shareholder value," Noranda president and chief executive officer Layle K. "Kip" Smith said in a statement, noting that the moves wouldnt affect customer service or ongoing growth and productivity projects.
Further job cuts might be necessary, although Noranda will try to avoid them, a company spokesman told AMM via e-mail. "Our desire is for this to be the only work force reduction, but we will continue to examine business conditions, as well as our ability to reduce our costs through other measures."
The announced layoffs are expected to cost Noranda $6 million but save the company $15 million annually, the company said. Most of the $6-million charge will result from one-time termination benefits expected to be recorded in the fourth quarter of 2013 and paid in the first quarter of 2014.
The cuts will affect approximately 75 people in Norandas primary aluminum business and 30 to 40 employees each in its alumina, bauxite and flat-rolled products operations, as well as 10 employees with corporate functions, Noranda said.
The geographic location of the layoffs generally follow the center of operations for each business, the company spokesman said.
Norandas smelter is based in New Madrid, Mo.; its alumina refinery is in Gramercy, La.; its bauxite mine is in St. Ann, Jamaica; and its headquarters are in Franklin. The flat-rolled cuts, mostly at Norandas Huntingdon, Tenn., rolling operations, will be achieved largely through attrition, the spokesman said.
The work force cuts come as part of previously announced cost-cutting plans and after Noranda earlier this year issued a Worker Adjustment and Retraining Notification (WARN) Act notice for 58 workers at its rolling mill in Salisbury, N.C., effective Dec. 30 (amm.com, Nov. 15).
The cost-saving measures, referred to by Noranda as the "CORE productivity program," aim to save the company $225 million between 2014 and 2016.
Noranda had about 2,500 employees as of Nov. 30, the company said.
The layoffs also coincide with historically low aluminum prices. The London Metal Exchange cash primary aluminum contract ended the official session Dec. 17 at $1,745.50 per tonne (79.2 cents per pound), 17.8 percent below a 2013 high of $2,123 per tonne (96.3 cents per pound) on Feb. 15.