Dec. 12--A major employer in Sand Springs will lay off roughly 40 percent of its employees.

Managers at the Gerdau Ameristeel steel mill told union officials this week that they expect to issue layoff notices to about 150 people, said Troy Zickefoose, vice president of the local United Steelworkers union.

The plant employs about 300 production workers and about 75 administrators, and numbers approaching half of each side will be let go.

"We've been told it's from the drop in prices and demand for steel," Zickefoose said. "The main thing we make here is rebar, and that is mostly used in construction."

The company, a unit of Porto Alegre, Brazil-based Gerdau SA, confirmed that it is cutting employees worldwide but would not provide details on the Sand Springs location.

"The steel market has been going through a decline in demand, which started in September," said Ramiro Prudencio, a spokesman for Gerdau Ameristeel. "The company has begun targeting a series of measures, including a reduction in personnel."

Gerdau Ameristeel, the parent company's North American arm, had record earnings of $316.9 million in the third quarter.

"The goal is to make sure the company is in a position to respond to the declining market," Prudencio said.

The workers' last day will be Friday, but they will be paid for the next two months, said Linda Baird, who handles layoff notifications for the Oklahoma Employment Security Commission. Gerdau Ameristeel filed

the notification with the state Wednesday, meaning workers will be paid through Feb. 11.

The Sand Springs plant has been hit hard by declines in commercial building and road construction, which are the primary users of the steel bars and reinforcing bar produced at the factory.

A worldwide recession, decreases in lending and budget shortfalls at city and state levels have helped decrease activity in both the building and road construction sectors.

Zickefoose hopes an increase in road construction will raise the demand for steel. Earlier this week, President-elect Barack Obama announced plants to embark on a massive highway construction program to help stimulate the economy.

"If the highway and bridge construction gets going, they could start hiring again," Zickefoose said.

The layoffs mark the latest turbulence in the recent history of the steel mill that was founded in 1917 and has been a pillar of the community since.

The factory was sold in April 2006 by Sheffield Steel Corp. to Gerdau for $94 million. At the time, the company had more than 460 employees. The company also signed a four-year labor contract with the United Steelworkers.

Sand Springs Chamber of Commerce president J.C. Kinder said the layoffs will be a blow to the city.

"I think anytime you lose people, that is going to have an effect across the city," he said. "Those people purchase things at businesses across town."

Kyle Arnold 581-8380 kyle.arnold@tulsaworld.com

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