Freeport to Cut Jobs, Production

Updated from 7:30 a.m.

Freeport-McMoRan Copper & Gold (FCX Quote) said Wednesday it will reduce production because of sharp declines in copper and molybdenum prices and will suspend its annual dividend of $2 a share.

The company stated that "the suspension of our dividend reflects the sharp and rapid decline in copper and molybdenum prices, the dislocation of capital markets and the uncertain economic outlook."

Freeport said it plans to reduce copper production by about 200 million pounds in 2009, and slash 2010 production by about 500 million pounds from October 2008 estimates, because of a "dramatic recent shift in global economic conditions."

"We are responding aggressively to the current market conditions which have weakened dramatically in recent weeks," said the company's top officials in a press release. "These revisions to our plans will allow us to reduce operating costs and capital spending, adjust our production profile to better match market requirements and preserve our valuable resources for anticipated improved market conditions."

Freeport also said it took additional steps in November to reduce its 2009 capital expenditure budget by $1.2 billion, including $900 million for major projects.

The company also said it would suspend operations and lay off the bulk of its workers at a New Mexico mine, cut production estimates through 2010 and curb other costs as it struggles to cope with plummeting copper prices.

The layoffs come on top of about 800 jobs cut last month at its Western copper and molybdenum mines. Freeport-McMoRan, one of the world's largest copper producers, said Wednesday more steps may be taken if global economic conditions don't improve. Its shares fell 21% to a record low.