Kennecott cutting 10% of Utah work force

The parent company of Kennecott Utah Copper has announced it is cutting 10 percent of his Utah work force. Rio Tinto said Friday that the company would lower its Utah headcount by 241 people.

A news release stated that the layoffs would include 66 current employees and 175 contractors. The cuts for the contractors have already begun and would begin for employees next week, said Jana Kettering, senior adviser for communications and media relations in Utah.

Reductions are coming from within Kennecott Utah Copper, Kennecott Land, Kennecott Exploration and Rio Tinto business functions, she said.

Kettering cited the slumping global economy as the reason for the company's decision to cuts jobs.

"The metals market has declined significantly over the past several months and we are having to respond to these market conditions," she told the Deseret News. More cuts could become necessary if the "global economic crisis" continues to worsen, she added.

Rio Tinto employs about 2,400 workers in Utah, Kettering said. Rio Tinto, an international mining group headquartered in the United Kingdom, is the parent company of Kennecott Land, Kennecott Exploration and Kennecott Utah Copper, which is the second-largest copper producer in the United States.

The employees affected by the action will be offered severance packages and outplacement assistance, she said.

Kettering said that Rio Tinto delivered a letter to elected officials on Friday to notify them of the planned employee reduction as required by the Work Adjustment and Retraining Notification Act.

Last month, Rio Tinto announced a detailed plan to respond to the unprecedented speed and severity of the global economic downturn, which has caused sharp falls in commodity prices and a significantly weaker outlook, the release stated. One of the announced initiatives was the elimination of 14,000 positions worldwide, composed of 8,500 contractors and 5,500 Rio Tinto employees.

The initiatives would be aimed at preserving value for shareholders by conserving cash flow and reducing levels of debt, the release said.

"We know these decisions have personal consequences to those involved and those who remain," Andrew Harding, president and chief executive officer of Kennecott Utah Copper, said in a Friday statement announcing the job cuts.

"Rio Tinto must respond, like so many other companies, to this global economic crisis which may continue to deteriorate," he said.

E-mail: jlee@desnews.com

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