Iron Giant to Cut Workforce

SAO PAULO, Brazil -- The world's largest iron ore producer has cut 2.1% of its work force because of slumping global demand for the raw ingredient used to make steel.

Companhia Vale Rio Doce SA (RIO Quote) says the cuts amount to 1,300 jobs from its global work force of about 60,000. An additional 5,000 workers are being put on paid vacation to slow production, and 1,200 are being retrained for new assignments.

The cuts confirmed Wednesday came after company executives in late October announced a 10% ore production cut because of falling demand, primarily from China.

Vale is the planet's second-largest miner after the Anglo-Australian BHP Billiton Ltd. Vale's American depository shares in New York were down 5.5%, or $0.57 to $9.98.