"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.