Teck Cominco Ltd. (TSX, NYSE:TCK) will shed approximately 1,400 jobs from its global workforce as it battles to trim costs and bolster competitiveness amid weakening commodity prices.
The diversified Vancouver miner said its workforce would shrink by 13%, resulting in annual savings of approximately $85 million.
With its US$14 billion acquisition of Fording Canadian Coal Trust still fresh on its books, Teck will also cut coal production in 2009 to 20 million tonnes due to declining global steel demand.
"Given continued economic uncertainty, a significant reduction in our workforce is needed to further reduce costs and position Teck for both short and long-term competitiveness," said Teck president Don Lindsay, who described the decision as "difficult."
In total, about 1,000 employee and 400 contractor positions will be eliminated by the end of 2009. Most of the cuts will be completed in the first quarter.
Teck, which is B.C.'s second biggest public company, expects to take a charge of approximately $35 million in the first quarter for severance and other costs related to the reduction.
The company said that each of its strategic business units is adjusting personnel levels to protect operating margins given the difficult commodity markets.
The debt-laden company is also significantly reducing staff and contractors associated with exploration activities and research and development.