AK Steel Holding Corp. has announced that it will cut the pay of its salaried employees by five percent indefinitely, citing a drop in demand for its products.
The pay reduction will begin on January 1 and will affect all salaried employees, including the company's CEO and all executive officers.
"Unfortunately, this extraordinary global economic downturn requires significant and rapid measures to reduce our costs in light of sharply lower order levels from our customers," said James L. Wainscott, chairman, president and CEO.
AK says that it plans to implement other salaried workforce cost reductions, including freezing the defined benefit plan for salaried employees and replacing it with a defined contribution retirement benefit, and offering temporary incentives for voluntary retirements. The company said it could not rule out the need for involuntary salaried job reductions if the pay reduction and voluntary retirements do not produce adequate cost savings.
AK Steel currently employs about 1,500 salaried employees, which are based at its West Chester, Ohio headquarters, at its Middletown, Ohio research center, at its field sales offices and in seven steel operations in four states. The company said that about 350 salaried employees are currently eligible for a company-provided retirement benefit.