According to the Wall Street Journal, ArcelorMittal - the world’s largest steelmaker - informed its steelworkers union that it could eliminate 16 percent of its US hourly work force, beginning in January, in response to weaker demand globally for automobiles, appliances and machinery. Alerting the United Steelworkers that it has targeted 2,444 indefinite layoffs at its Burns Harbor steel plant outside Gary, Indiana, the company also added that layoffs are not yet imminent.

The company employs more than 15,000 hourly workers in the US and 326,000 worldwide. Spokesman William Steers told the paper: “Potential work-force reductions are a direct result of the extraordinary economic environment we are facing.”

Recently, the company announced measures in response to the global economic slowdown - including temporary output cuts of 35 percent, up from a previous 15 percent, a pause in its growth strategy, deeper cost cuts and a reduction in debt.

ArcelorMittal is the second steel company in the U.S. to slash its workforce so far this year. US Steel Corp (X) said two weeks ago that it would lay off 675 unionized workers, or about 2% of its staff, due to slackening demand for steel products.

Steelmakers are cutting back production to reflect weaker steel demand from customers in key automotive, construction and retail appliance industries. The big three US automakers are lobbying for a $25 billion bailout package to avoid bankruptcy, while appliance manufacturer Whirlpool Corp more than doubled its planned layoffs to about 5,000 people in response to weaker demand.