Alcoa (NYSE:AA) Cut Jobs to Survive Says Spokesman

With jobs around the world at a premium, especially in America, Alcoa (NYSE:AA) has had to make hard decisions and cut up close to 33 percent of its core workers, with about 30,000 being let go.

In the past, Alcoa has said they had to do it in order to survive, and company spokesman Kevin Lowery reiterated that recently, saying, "The first step was to battle through the downturn," Lowery says. "It was very, very dire times. And it wasn't that long ago."

Some have questioned Alcoa's, and others', motivations, but that makes no sense. If there was work for workers to do, Alcoa would have had to have kept them. They wouldn't have let them go if it would have cost them money or orders.

That's what is a check and balance in all this. A company can't let people go and survive unless there's simply no work or new orders to justify keeping them.

They can't tax or print money like a government can do to temporarily ride the tough times out.

Alcoa was right to do it, or the rest of their workers may not have eventually had a job either.

Are Alcoa (NYSE:AA) Job Cuts Going to Hurt Company?

During the recession, Alcoa (NYSE:AA) was among the top companies for cutting workers, and once the recession is over, the question becomes whether they've cut their work force too much, and how that will affect their performance, and retention rates of existing workers, who will ultimately want changes.

Alcoa spokesman Kevin Lowery said, "We essentially eliminated 30,000 jobs. ... The way we look at it, is we have about 60,000 employees left,"

The point is in the eyes of Alcoa, they had no choice if they wanted to survive as a company during the worst of the recession.

Lowery added that the other way to look at it is they were trying to preserve the jobs of the 60,000 remaining employees in order to "have a business that would be sustainable moving forward."

Long term, history has shown a lot of companies cutting too deeply can take much longer to recover than counterparts who didn't cut as deeply. Too deep of a cut is usually defined as 20 percent or over of the workforce, which Alcoa was much higher than.

Productivity and earnings are always a benefit of those willing to make the hard decisions in the short term, but it the toll it takes on employees who feel overwhelmed and burned out, can reduce productivity over the long term, and good employees could end up leaving the company.

Short term this is definitely a benefit to Alcoa, but only time will tell if they'll end up being hurt by it once demand significantly returns in the market for aluminum.