Cost-cutting plan at Alcoa includes loss of 13,500 jobs
PITTSBURGH — Alcoa Inc., the world's third-largest aluminum maker, said yesterday it will cut 13,500 jobs, or 13 percent of its workforce, and slash spending and output to cope with the global economic slowdown.
The Pittsburgh-based company also said 1,700 contractors will be cut as part of a broad-based plan to reduce costs that includes the planned sale of four business units and a global salary and hiring freeze.
As a result of its actions, Alcoa expects total fourth-quarter charges of between $900 million and $950 million. The company plans to report quarterly results on Monday. Alcoa also said the moves are expected to save the company about $450 million annually, before taxes.
ECONOMIC OUTLOOK FOR U.S. STILL GRIM
WASHINGTON — A measure of the U.S. services sector improved slightly in December, beating analysts' estimates, but pending home sales and factory orders both fell more than expected and the overall economic outlook remains grim.
In a reading bolstered by improvements in new orders and employment, the Institute for Supply Management said yesterday its services sector index rose to 40.6 in December, from 37.3 in November. Economists had expected the index to slip to 37.
But the index from a trade group of purchasing executives continues to signal the sector is shrinking, as any reading below 50 points to contraction. Prices continued to fall, with that component of the index hitting its lowest level since it was first reported in 1997.
ITUNES SONGS COST AS LITTLE AS 69 CENTS
SAN FRANCISCO — Apple Inc. is cutting the price of some songs in its market-leading iTunes online store to as little as 69 cents and plans to make every track available without copy protection.
In Apple's final appearance at the Macworld trade show, Apple's top marketing executive, Philip Schiller, said yesterday iTunes song prices will come in three tiers: 69 cents, 99 cents and $1.29. Record companies will choose the prices, which marks a significant change, since Apple previously had all songs selling for 99 cents.
Apple gave the record labels that flexibility on pricing after it got them to agree to sell all songs free of "digital rights management," or DRM, technology that limits people's ability to copy songs.
EX-ENRON CEO TO BE RESENTENCED
HOUSTON — A federal appeals court yesterday upheld former Enron Corp. Chief Executive Jeffrey Skilling's convictions for his role in the energy giant's collapse but vacated his 24-year prison term and ordered that he be resentenced.
A three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans denied Skilling's request to overturn his convictions. Skilling argued his convictions were invalid because of incorrect legal theory used by his lawyers, faulty jury instructions, a biased jury and prosecutorial misconduct, including accusations of witness intimidation and withholding evidence.
While denying those arguments, the judges agreed U.S. District Judge Sim Lake erred by applying guidelines that resulted in a prison term of 24 years and four months, and ordered that Skilling be resentenced.
BILLIONAIRE, 74, COMMITS SUICIDE
BERLIN — German billionaire Adolf Merckle threw himself in front of a train after his business empire, which included interests ranging from VW cars to pharmaceuticals to cement, ran into trouble in the global financial crisis, his family said yesterday.
The 74-year-old's body was found Monday night on railway tracks at Blaubeuren in southwestern Germany, prosecutors in nearby Ulm said in a statement. They described the death as a "railway accident" and said there was no evidence anyone else was to blame.
His family, which had reported Merckle missing after he failed to return home Monday, issued a brief statement saying he took his own life.