OneSteel has announced that it will axe 200 more jobs as it cuts steel production by a further 125,000 tonnes due to dwindling demand. The announcement came as Organization for Economic Co operation & Development warned that developed country growth would collapse by 4.3% in 2009 and by 0.1% in 2010. This meant unemployment could hit 8.4% by the end of 2009 and 9.9% in 2010.

OneSteel is feeling the fallout from the global slowdown. In its February results presentation, it said that it had cut 800 jobs since November. That figure has now reached the equivalent of 1000 full time positions as the company struggles to deal with excess supply.

A OneSteel spokesman said that "We have focused on matching reduced activity levels with number of hours worked in a cost effective way. There have been reductions to permanent, temporary and labor hire employees as well as reductions in overtime and changes to shift rosters."

OneSteel had scheduled to boost production in April 2009, but lower sales have resulted in higher inventories. It said that this would not affect its 5 million tonnes of iron ore sales in 2009. Its forecast for a full year underlying profit of between USD 325 million and USD 375 million also remained intact.

Mr Geoff Plummer CEO of OneSteel said that it was positioned to increase production quickly should demand improve. He added that "The announced production adjustments at Sydney and Laverton reflects our primary focus to bring inventory levels in line with demand under our back to basics response to the global financial crisis. Lower sales in the early part of the second half, due to more extensive market destocking than expected, and lower underlying demand has resulted in our inventory reduction to date being behind plan."

Mr Plummer added that there was no change to the reductions announced in February to OneSteel's Whyalla plant in South Australia.