Alcoa plans 13,500 layoffs

Alcoa Inc., the world’s third-largest aluminum maker, said Tuesday it will cut 13,500 jobs, or 13 percent of its work force, and slash spending and output to cope with the global economic slowdown.

The reductions expand on cost-cutting measures announced in October, when Alcoa reported a 52-percent decline in third quarter profit, due to sharply lower aluminum prices, weaker demand and a charge from curtailing a smelter in Texas.

In its latest announcement, which came after U.S. markets closed Tuesday, the Pittsburgh-based company said it will sell four business units and impose a global salary and hiring freeze.

WASHINGTON

Fed feared sharp contraction

Even as Federal Reserve officials slashed their key interest rate to a record low and pledged to use other unconventional tools to fight the worst financial crisis since the 1930s, they still feared the economy would be stuck in a painful rut for some time.

Documents released Tuesday provided insights into the Fed’s historic decision to ratchet down its rate to near zero from 1 percent at its Dec. 15-16 meeting.

In the first action of its kind in the Fed’s 95-year history, Fed Chairman Ben Bernanke and his colleagues created a target range for its rate, putting it at zero to .25 percent.

Fed officials expected the economy would “contract sharply” in the final three months of 2008 and in “early 2009,” the document said. Some participants suggested “the distinct possibility of a prolonged contraction.

HOUSTON

Ex-Enron chief will be resentenced

A federal appeals court Tuesday upheld former Enron Corp. Chief Executive Jeffrey Skilling’s convictions for his role in the energy giant’s collapse but vacated his 24-year prison term and ordered that he be resentenced.

A three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans denied Skilling’s request to overturn his convictions. Skilling argued his conviction was invalid because of what his lawyers argued were incorrect legal theory, faulty jury instructions, a biased jury and prosecutorial misconduct, including accusations of witness intimidation and withholding evidence.

While denying those arguments, the judges agreed U.S. District Judge Sim Lake erred by applying guidelines that resulted in a prison term of 24 years and four months, and ordered that Skilling be resentenced.

From wire reports