Rio follows contractor job cuts with continued global cutbacks

Citing unnamed “insider” sources the newspaper said hundreds of jobs have been slashed, mostly in administration and project development.The city job cuts – which have not yet been confirmed by the miner – follow on from earlier downsizing at Rio’s mining operations.Meanwhile on Friday Rio announced 241 jobs would be axed from its Kennecott Utah copper operations in the United States, in an effort to cope with falling commodity prices and a “significantly weaker” outlook.In a statement Kennecott Utah copper chief executive Andrew Harding gave a grim outlook and said the US layoffs were part of the miner’s strategy to protect shareholder value through cashflow conservation and debt reduction.“Rio Tinto must respond, like so many other companies, to this global economic crisis which may continue to deteriorate.” Harding said.The latest downsizing follows on from Rio’s December announcement that 14,000 jobs would be slashed across its global empire.Rio aims to reduce its $US38.9 billion ($A57.8 billion) debt burden by $US10 billion by the end of this year.Just last week Rio announced it was slowing work at its Argyle diamond mine in Western Australian and shedding around 220 staff. Meanwhile the miner shelved its $US371 million Pilbara automated train operations program in the state.Against a backdrop of falling commodity prices and hefty debt, broker ABN Amro has downgraded its forecast for Rio’s earnings and production, and said asset sales are on the cards.“We believe that Rio has some breathing space, but not a lot, and that the sale of Escondida may be required if economic conditions continue to worsen,” the broker said.

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