The world's third-largest aluminum producer Alcoa Inc. announced Tuesday it will reduce about 13 percent of its global workforce by the end of the year due to the faltering world economy.

To strengthen the company's competitiveness it will follow a series of specific actions to conserve cash and reduce costs. It will eliminate 13,500 jobs and an additional 1,7000 contractor positions. It will reduce primary aluminum output by 135,000 metric tons per year, lowering output by a total of more than 750,00 metric tons, or 18 percent, annually.

These are extraordinary times, requiring speed and decisiveness to address the current economic downturn, Klaus Kleinfeld, Alcoa's president and chief executive, said in a statement.

We will continue to monitor the dynamic market situation to ensure that we adjust capacity to meet any future changes in demand and seize new opportunities that emerge, he added.

Alcoa's production cuts will not help establish a floor for aluminum prices, which fell to roughly 65 cents per pound a few week ago from $1.50 per pound in July, said analyst Charles Bradford of Bradford Research/Soleil Securities, according to the Associated Press.

The problem is lack of demand. With the lower price, Alcoa has got to try to bring its costs down. There is no way they can make money at 65-cent aluminum, Bradford said.