U.S. industrial giant ALCOA INC (NYSE: AA). said it would reduce smelting output 18 percent and close out 13,500 jobs due to the economic downturn.

"These are extraordinary times, requiring speed and decisiveness," Alcoa President and Chief Executive Officer Klaus Kleinfeld said in a statement.

"We are taking a wide-ranging set of aggressive, but prudent, measures," he said.

Alcoa said it would enact a hiring and salary freeze through the year and sell four non-core businesses. In addition, the company said it would cancel 1,700 contracted jobs.

The steps would save about $450 million a year before taxes, the company said.

The company said it would sell four businesses that brought in $1.8 billion in 2008: Electrical and Electronic Systems, Global Foil, Cast Auto Wheels and Transportation Products Europe. The combined sales of the companies that employ 22,600 people would fetch "approximately $100 million, Alcoa said.