Miner SadREUTERS/Dado RuvicIt has not been a good week for some mining giants.
Anglo American, the FTSE-listed commodities giant, is in serious trouble and is set to cut around 85,000 jobs, roughly two-thirds of its staff, the company confirmed at an investor day on Tuesday. 
The company also announced on Tuesday that it has been forced to undertake what it calls a "radical" restructuring of its business to try to weather the commodity crash.
Anglo has unveiled a whole raft of changes to its business, and it isn't lying when it says they'll be radical.
The news of the changes came just one hour after another mining giant announced it was being forced into action to fight the commodity slump. The British-Australian firm Rio Tinto revealed that it needed to cut capital expenditure over the coming years.
For Anglo American, there are so many changes and cost cuts being put in place that it's pretty hard to keep up, but these are the most important:
  • The world's largest platinum miner will undertake a programme to dump roughly 60% of its total assets. In 2014, the company reported having total assets of around £44 billion ($66 billion), so the consolidation could remove as much as £26.7 billion ($40 billion) from Anglo's balance sheet.
  • 85,000 of the the roughly 135,000 staff under Anglo's control will lose their jobs in the coming years. A company spokesperson said of the job cuts: "Bear in mind that these include assets that we will sell, so the 85,000 jobs don't [all] disappear as many will be employed by new owners of those mines that we sell."
  • Anglo won't pay shareholders a dividend in 2015 or 2016, something that had been widely predicted. In November, an analyst note from HSBC quoted by the Financial Times suggested that Anglo could save around £730 million ($1.1 billion) by suspending its dividend.
  • It will cut costs by £2.5 billion ($3.7 billion) by the end of 2017. The cuts will come in three chunks; £1.1 billion ($1.6 billion) this year, £730 million ($1.1 billion) in 2016, and a final £670 million ($1 billion) in 2017.
  • Anglo will dispose of certain parts of its business, including its phosphate and niobium mining operations, hoping to raise around £2.7 billion ($4 billion).
  • The company's six businesses will be consolidated into just three: De Beers, the diamond mining arm; Industrial Metals; and Bulk Commodities.
  • De Beers' and Anglo American's London office will merge in 2017.
Anglo American was already restructuring, but it says the new changes are part of a plan "to transform the company's competitive position and create a more resilient business to deliver sustainable shareholder returns."
Speaking about the changes, the company's CEO, Mark Cutifani, said: "While we have continued to deliver our business restructuring and performance objectives across the board, the severity of commodity price deterioration requires bolder action. We will set out the detail of the future portfolio in February."
Anglo American South Africa MinersREUTERS/Siphiwe SibekoMiners at the end of their shift at the Anglo Platinum's Khuseleka shaft 1 mine in Rustenburg, northwest of Johannesburg, in 2013.
Essentially, Anglo is acknowledging that it is struggling to cope with the monumental slump in commodity prices. It is well known that the price of pretty much every commodity has tanked over the past few years. Bloomberg's all commodities index is down more than 50% since 2011, and as recently as last week iron ore hit its lowest level in 10 years.
Anglo's results reflect how much it is struggling right now. It recently reported that earnings were down 36% for the six months to June, compared with the same period in 2014. It was also forced to slash production for several of its commodities in October.

Investors are worried

Unsurprisingly, investors in Anglo are pretty worried about the company almost completely restructuring itself virtually overnight, and shares are tanking. The company's stock hit an all-time low on Monday afternoon, but things have gotten even worse Tuesday morning. Shares fell by more than 9% in early trade, and while they have recovered a bit, losses are still around 5.5% so far.
Anglo AmericanInvesting.comAnglo American's shares plunged on the news that it was undertaking a "radical" restructuring.
Things may be bad for Anglo American, but at least it's not alone. The miner has become just one of a series of big commodity firms to take dramatic action to try to stave off the effects of the crash.
Earlier Tuesday, Rio Tinto announced plans to cut capital expenditure by more than 10% to $5 billion in 2016, while in November, the platinum producer Lonmin sold off billions of shares at a penny each to try to hold off total financial collapse.
Both companies followed on from the huge troubles Glencore has been facing. At one point in September, the company's shares lost nearly 50% over the course of a couple of days, and boss Ivan Glasenberg told reporters he was preparing for "Armageddon."

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