Alcoa To Cut 1,500 Jobs In Wake Of Global Commodity Glut

Evidence that economic trouble overseas is having an adverse effect at home surfaced again this week with an announcement that Alcoa would scale back operations in two states.

The aluminum company is idling or closing smelters in New York and Washington, resulting in around 1,500 layoffs.

There is a worldwide glut in commodities as economies in China and elsewhere slow. Aluminum prices since January have plunged and Alcoa's sales have followed.

The company said this week that would idle one of its facilities in Massena, New York, and permanently closing another. It also is idling two smelters in Washington state.

Sen. Charles Schumer, D-N.Y., said he and other state officials were blindsided by the announcement.

Alcoa's headquarters is in Pittsburgh, but it maintains executive offices in New York.

By the first quarter of next year, Alcoa will have closed, divested or curtailed 45 percent of its total smelting capacity that was online in 2007.

The commodities glut has spilled over into other sectors like manufacturing.

On Tuesday, the Commerce Department reported that U.S. factory orders declined for the second straight month. That followed a report a day earlier from the Institute for Supply Management that found factory activity grew last month at its slowest pace since May 2013 as manufacturers pared their stockpiles and cut jobs.

While the U.S. employment picture has been improving, problems overseas are taking a toll, especially for U.S. companies with a global presence.

In September, Caterpillar said it was planning another round of job cuts that could exceed 10,000 people through 2018, as the construction and mining equipment maker attempts to offset slowing sales.

Alcoa recently announced that it will split into two businesses, a move that could let the products part of the company shake off the drag of the aluminum-producing segment.