Heavy lifting is no great problem if you have a decent lever. Waking up to discover that someone has chopped the end off, however, is quite a shock.

Such is the reason behind the announcement this week of a third production cut in as many months from the world's largest alumina producer, Alcoa. Two years ago it was hustling for growth, eventually losing out to Rio Tinto in the bidding war for fellow aluminium maker Alcan. Now the collapse of aluminium prices means that what was a reasonably shaped balance sheet has rapidly become one of the most unwieldy in the sector. Alcoa's $10bn of net debt represents just 2.5 times earnings before interest, depreciation and amortisation on 2008 estimates. But assume pessimistically that aluminium pricing does not recover this year from the current $0.7 per pound level, and that ratio could jump as high as nine times.

So, in order to find $450m in annual savings, the group is to fire 13,500 employees, or about 13 per cent of the workforce. A small selection of lossmaking businesses are to go, and capital expenditure plans have been halved to $1.8bn. Further cuts to smelting production, including a total shut-down in Tennessee, mean that Alcoa is temporarily reducing output by the equivalent of 18 per cent of its total capacity.

Yet incremental cuts announced this week represent just 0.3 per cent of global aluminium production. And Alcoa seems late to adjust to the new environment. North American steel producers, by comparison, have cut output by a collective two-fifths since August. With annual interest costs for Alcoa approaching $500m, and maintenance spending requirements of about $1.5bn, the company's 6 per cent dividend yield looks unsustainable. As a high-cost producer of a material sold mainly to customers in the developed world, Alcoa's heavy burden will continue to weigh on its shares.