Rio Tinto's shares surged more than 10 per cent at the start of trade in response to its plans to slash 14,000 jobs, cut spending and costs and sell assets due to the global economic crisis.
At 10.09am (AEDT), the stock was trading $3.95 or 10.56 per cent higher at $41.35.
The move to end 5500 of its 97,000 employee roles and 8500 of its 15,000 contractor jobs comes after analysts slammed the company for its massive debt - $US38 billion at October 31.
Rio Tinto chief executive Tom Albanese says the staff cuts will save the company $US1.2 billion a year.
"Given the difficult and uncertain economic conditions, and the unprecedented rate of deterioration of our markets, our imperative is to maximize cash generation and pay down debt," Mr Albanese said.
"By taking these tough decisions now we will be well positioned when the recovery comes."
Rio Tinto will also consolidate its offices around the world, cut costs and expenditure and put new assets up for sale.
The company's plan to reduce overall operating expenditure, including the job cuts, should save it at least $2.5 billion for the year in 2010.
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