Anglo American to shed thousands of jobs to counter metal price slump

Anglo American PLC on Friday said it swung to a pretax loss in the first half of 2015 after recording a substantial USD3.5 billion impairment, driven by the fall in commodity prices, and said it is aiming to cut 35% of its workforce as part of its cost-saving initiative.

Underlying EBIT decreased to $1.88 billion from $2.93 billion.

It declared an interim dividend of $0.32, in line with the same period a year ago.

In line with a warning issued earlier this month, Anglo took a non-cash impairment charge of $3.5 billion after tax.

The company said it would reduce costs “through the reduction” of its 6,000 overhead and indirect job roles.

Weaker commodity prices knocked US$1.9bn from first half earnings, with iron ore’s contribution more US$700mln down, copper slumped 77% to US$174mln and diamond arm De Beers saw a US$200mln dip.

This will include “those that will transfer with the businesses we are divesting”, he added.

Shares in the company surged as much as 5 percent higher at market open before paring gains to trade around 1 percent higher, after the firm maintained its dividend, lifting the stocks off 13-year lows seen earlier in the week. Loss per share was $2.34 compared to profit of $1.14. Anglo has previously flagged the sale of a number of assets, which expects will generate $3 billion.

Net debt increased to USD13.5 billion at the end of June from USD12.9 billion at the end of December.

“We are unrelenting in enforcing strict cost and capital discipline”, Cutifani said in the statement.

“Having defined our portfolio and significantly improved operational performance, now is the right time to accelerate the right-sizing of the organisation that supports the future business”.