Lower profits force Alcan to cut jobs

Alcan will lay off 5-7% of its 52,000 workers worldwide, including some staff at its head office in Montreal.

The announcement follows a disappointing third quarter, in which the aluminum giant earned US$151 million (or 46 per share), down from US$181 million (85 per share) in the corresponding period of 2000. However, revenue rose to US$3.2 billion from US$2 billion, reflecting the inclusion, in late 2000, of Algroup of Switzerland. The latest quarter also benefited from $30 million in foreign-exchange gains.

Alcan is also expecting a loss in the fourth quarter, owing to a one-time charge of US$250 million for restructuring. The restructuring is designed to save $200 million per year.

As a result of the acquisition of Algroup, most of Alcan’s workers are now concentrated in Europe. Canadian operations are mainly in Quebec.

Aluminum prices averaged $1,405 per tonne in the third quarter, down from $1,587 a year earlier. Alcan’s total aluminum volume rose to more than 1 million tonnes from 824,000 tonnes.