BHP Billitons Cost Cutting Plan

Added: (Sat Mar 13 2010)

Pressbox (Press Release) - It is hard for small business owners to believe that one of the mining giants would actually need to cut costs to ensure their cash flow didnt dry up, but even the biggest companies need to make hard decisions to come out on top.
Even the biggest companies sometimes need to sell assets and slash employment costs to stay afloat in the bad times. BHP Billiton has done just that over the last year or so, with 2,000 jobs axed and various mines and other projects either shut down or sold. While these kinds of decisions are no doubt hard to make they are necessary and the end result has been that those mines that are making a profit have been able to stay in production.

BHP Billiton is amongst the top producers in the world for copper, aluminium, zinc, nickel, gold uranium and coal. That they had to downsize production to keep their cash flow healthy might on the face of it seem like disaster, but every company, whether it is big or small needs to make hard decisions. It doesnt make sense to keep a mine in production if it is not making a profit and when the prices fall in a recession then profits often cease.

Having to close mines and lay off staff may seem like a disaster for BHP Billiton. But while it is for those whove been laid off, overall it has kept BHP Billiton in good health, just like pruning unproductive branches off a shrub makes it grow better. The end result is that BHP Billiton will then be able to expand its operations when the price for those commodities once again rises. And if it doesnt rise, expansion into another more productive area is made possible.

While BHP Billiton may have had to put off what seems like quite a large number of workers, compared with their competitors, their cost cutting is just a tiny drop in the bucket.
Mel loves shopping and writes about bhp billiton among other business related topics.