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Vale Inco trims 261 Sudbury workers among 900 global layoffs

Vale Inco Ltd. is cutting 261 jobs from its Greater Sudbury workforce of 5,500 as part of a move to eliminate 900 full-time positions across its global nickel operations.
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Inco Smokestack

Vale Inco Ltd. is cutting 261 jobs from its Greater Sudbury workforce of 5,500 as part of a move to eliminate 900 full-time positions across its global nickel operations.

These layoffs, which are effective immediately, represent nearly half of the 423 Canadian jobs being eliminated through this announcement, a result of ongoing challenges in the world nickel market.

"These are the toughest decisions that any company has to make because they're impacting people," says Cory McPhee, corporate spokesman for Vale Inco.

"We want to treat them with dignity and respect. This is no indication of the contributions of these employees, but a function of a very depressed market condition we're experiencing right now."

The type of jobs being trimmed largely consist of staff positions, such as corporate management and business support functions. These could potentially include such roles as supervisory positions, or in support departments such as accounting and information technology, though the exact nature of the trimmed jobs is unknown.

While the majority of workers are non-unionized staff, 65 members of United Steelworkers Local 2020 are being impacted by the move.

Core production and maintenance jobs remain untouched in these particular cuts, meaning that members of United Steelworkers Local 6500 are unaffected.

While no specific numbers were available for Sudbury, McPhee says that roughly 25 per cent of the 900 globally lost jobs will be eligible to pension-eligible, meaning they would be able to immediately go on their pension if they wish.

The remainder will be offered "appropriate" severance packages. Transitional support, such as financial and career counseling, is also expected to be provided.

"We're trying to streamline the operation, become more efficient and control our costs. Today's announcement is solely based on a restructuring of the operation."

This round of cuts is in line with Vale Inco's announcement in December 2008 that it was scaling back some of its Sudbury operations in order to make the business more competitive, McPhee says.

At that time, the company announced it was shutting down the Copper Cliff South Mine for an undetermined period of time, something which has happened as scheduled.. The Copper Cliff Deep project was also postponed for 12 months.

"Unfortunately, the tough decisions announced today are necessary in these exceptional times," said Tito Martins, Vale Inco CEO and president, in a release. "The declining nickel price and reduced demand for nickel make it clear that continuing to operate in our current fashion is simply not sustainable. The measures we're announcing today are intended to address the immediate health of the business and help reshape the organization for a long-term, successful and sustainable future."

Following these cuts, Vale Inco's employment levels in Canada remain 700 employees higher than those employed by Inco prior to the acquisition in October 2006, which "speaks volumes" about its commitment to Canada, McPhee says.

This round of cuts follows on the heels of a recent announcement by Xstrata Nickel that it was trimming 686 workers from its Sudbury operations.

The price of nickel has slid steadily over the last several months, hovering between roughly US$4.30 per pound on March 3, and US$5.50 per pound in early January. In the same period last year, prices sat at nearly US$15.00, before dropping to nearly US$9.00 in September 2008.