Rio to cut 14,000 jobs worldwide

Rio Tinto is proposing to cut 14,000 jobs across its global workforce as part of major cost reduction programme.

The mining giant says it is responding to a fall in demand for raw materials caused by the global economic downturn, which it describes as of unprecedented rapidity and severity.

The group wants to reduce capital expenditure by over 50% in 2009 in efforts to cut operating costs by $2.5 billion a year, by 2010. It may also add to the list of its assets earmarked for disposal.

Analysts suggest that the group needs to take drastic action to reduce debt of $40 billion, following BHP Billiton’s announcement at the end of November that it had scrapped plans to acquire the group in a $66 billion hostile takeover bid.

At the time, BHP Billiton said it still firmly believed in the benefits of a merger with Rio but was concerned about the deteriorating global economy.

According to a report in The Telegraph, Rio employs 5,500 permanent and 8,500 contract staff at its London headquarters.