Alcoa said yesterday it will eliminate 13,500 jobs, or 13 percent of its work force, in order to conserve cash and cut costs in the face of the global economic downturn.

The job cuts, including 260 corporate staff positions, will occur by the end of the year. The aluminum maker also is eliminating 1,700 contractor positions; freezing salaries and hiring; slashing capital expenditures 50 percent; selling four businesses that employ 22,600 at 38 locations; and increasing the amount of smelting capacity it has idled to 750,000 metric tons per year, or 18 percent of its annual output.

"These are extraordinary times, requiring speed and decisiveness to address the current economic downturn, and flexibility and foresight to be prepared for future uncertainties in our markets," President and CEO Klaus Kleinfeld said.

Alcoa spokesman Kevin Lowery said Alcoa has 1,600 to 1,800 employees in Western Pennsylvania who work at two buildings on the North Shore and the Alcoa Technical Center in Upper Burrell. All of the area employees are corporate staff. Some of the 260 corporate jobs targeted worldwide have already been eliminated, including 35 to 40 positions at the technical center that were cut in November, Mr. Lowery said.

The remaining cuts will be made on a department-by-department basis, he said.

Alcoa said it will take a fourth-quarter, after-tax charge of $900 million to $950 million, or $1.13 to $1.19 per share, to reflect the cost of the restructuring. About 80 percent of the charge will be non-cash, the company said. The measures are expected to generate pretax savings of $450 million annually.

Alcoa is incorporated in Pennsylvania but moved its headquarters to New York officially in 2006, seven years after opening a corporate office there.

Analysts are expecting Alcoa to record a loss of 5 cents per share when it reports 2008 results on Monday. The estimate is based on continuing operations and excludes one-time charges for restructuring and other items.

Profits for the first nine months of 2008 fell 42 percent to $1.12 billion, or $1.36 per diluted share.

Sales were off 5 percent to $22.23 billion.

The austerity measures did not include reducing Alcoa's quarterly dividend of 17 cents per share.

Additional production cutbacks of more than 135,000 metric tons announced yesterday include idling a smelter in Alcoa, Tenn.

The businesses being sold generated operating losses of $105 million last year on revenue of $1.8 billion. They include electrical and electronic systems, cast auto wheels and the European transportation products unit.

Alcoa said it expects to receive net proceeds of $100 million from the divestiture.

Metals producers have been among the hardest hit by the recession because of their exposure to the automotive industry and a dramatic spike in raw materials and energy prices last year. U.S. Steel said in December it would idle production at several North American plants, idling about 3,500 workers.

Alcoa shares closed yesterday at $12.12, up 26 cents. They slid 69 percent last year, hitting a 52-week low of $6.80 on Nov. 20.