Global steel manufacturing giant ArcelorMittal said it may lay off 2,444 employees indefinitely at its Burns Harbor plant, Indiana in January, in keeping with its plan to reduce production in North American by 40 per cent due to fall in demand for steel in the US and worldwide.

The company has informed the United Steelworkers about the possibility of an "indefinite layoff" at the Burns Harbor plant beginning the second half of January.

The company made this announcement keeping in line with its plan to cut back on steel production in North America by 40 per cent due to weak demand for steel globally, according to the release.

"Potential work force reductions are a direct result of the extraordinary economic environment we are facing, and the company hopes to return workers to their jobs as market conditions warrant," the release said.

ArcelorMittal, which has nearly 4,000 employees at its Burns Harbor plant had said that the steel production at the Burns Harbor facility has been producing at a "significantly reduced rate" since October which had forced the company to idle two of its blast furnaces since last month due to lack of orders.

Jim Robinson, director of United Steelworkers District 7 unit, said the union is negotiating with ArcelorMittal to minimise the number of layoffs as the union was aware that the plant had no orders and no steel was being produced at the plant since the last two months and workers were sitting idle.

He said that logically when the company lays off 2,444 workers, it is literally shutting down the plant, which happens to be one of its most profitable facility in the US.

In September, ArcelorMittal averted a strike by the union members of the United Steelworkers that represent steelworkers at all its 14 US plants, by arriving at a tentative four-year wage agreement that included a $6,000 signing bonus, a $1 hourly wage increase in the first year and better health benefits. (See: ArcelorMittal averts strike at US plants; reaches agreement with USW) 

Steel makers in the US have been hit hard with the economic slowdown as the construction industry, which is the largest consumer of steel, is at a standstill and the second largest consumer, the auto industry is suffering one of its worst downturns in decades. Adding to the woes, the demand for steel is also weak in the appliance industry.

The Luxembourg-based company had said this month that it would cut production by 40 per cent in the US, more than 30 per cent in Europe, and in Asia, Russia and Africa by more than 35 per cent. (See: Slowdown forces ArcelorMittal to cut output by up to 35 per cent)

In the beginning of the month, ArcelorMittal had laid off 400 of its 1,450 workers  at its plant in Cleveland and idled two blast furnaces and also temporarily laid off of 168 workers at its Georgetown steel mill.

Last week its US rival, US Steel Corp, the largest steelmaker by production in the US, also laid off 675 workers, or about 2 per cent of its staff, due to decline in demand for steel products.

The Republic Engineered Products Steel Plant will also idle their Lorain plant in Cleveland next month, which will result in 400 production and maintenance employees being laid off.

In addition to cutbacks in the US, ArcelorMittal has laid off or stopped production in France, Belgium, Brazil and Hungary, while in South Africa it terminated 2,000 temporary workers to save cost amid decline in sales.