Anglo American is to cut another 9,000 jobs in addition to 10,000 previously announced and scrap its dividend after posting lower than expected profits, the mining giant said this morning.

Anglo shares lost slightly more than 12 per cent to £10.90 in early dealings in London, wiping nearly £2 billion off its market value.

The company announced a $2 billion (£1.4 billion) cost saving programme in response to the global downturn and will cut around 10 per cent of its workforce.

Cynthia Carroll, chief executive, said this morning: “The breadth and severity of the global economic downturn and its impact on growth rates in key sectors and economies are difficult to overstate. From global automotive production to construction activity in emerging markets, there was a marked contrast between the first and second halves of 2008, when commodity prices fell sharply.”

Anglo American was buoyed by soaring commodity prices in 2008, but Ms Carroll said the global economy had turned "sharply downwards" in the second half.

Ms Carroll said: "This was a very difficult decision for us to reach. We're bringing our work force in line with revised production and growth plans." Anglo American said it would not reveal the business units or countries affected by the job losses until it had "worked through the process with governments and unions around the world."

In December the company said it was to cut its capital expenditure by half in response to the fall in demand for minerals and metals.

Anglo hopes that stimulus packages in 2009 will boost commodity prices through large-scale infrastructure prices. Asked about the risk of the stimulus packages failing to materialise, she said: "I don’t think we can quantify exactly where the spending will be applied, but we expect it to be focused on infrastructure".

Profit before tax fell from $8.8 billion to $8.6 billion, with group revenue down 7.6 per cent to $33 billion for calendar 2008. Net profit plunged by 29 per cent to $5.2 billion.

Richard Curr, head of dealing at stockbrokers Blue Index, said dealers are taking profits on a disappointing set of full-year results. Underlying earnings are below consensus, and the group is not paying a final dividend.

He said Anglo had provided a particularly poor outlook statement, "which will probably have a negative knock-on effect for the sector, and probably the market. On a positive note, unlike peers, there were no major write-downs".

Mr Curr said he expected selling pressure on the shares and sector, with downgrades to follow.

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