Corus spokesman Dick Schiethart said the reduction in hours will be spread across 6,400 workers, who will each work one day less per week over a period of six weeks.

He said Corus has applied for a government-funded work-reduction scheme, which is part a 6 billion euro ($7.6 billion) package announced last month to boost the flagging Dutch economy.

The scheme would allow for affected workers to be partially paid unemployment benefits, with Corus paying the balance of the original salary.

Corus, Europe's second-largest steelmaker, said last month it expects to produce about 30 per cent less crude steel than planned during the two quarters to the end of March 2009 due to the global economic slowdown.

Schiethart said the reduction in work hours directly stems from the cut in production, but declined to indicate how much money the company would save if granted the government support.

Corus, based at Ijmuiden near Amsterdam, employs 11,300 workers in the Netherlands.

Gerd Riphagen, a spokesman for Social Affairs Minister Piet Hein Donner said the ministry is examining Corus' application and although a decision could be made within the week.

PRODUCTION CUTS

Corus' production cuts are part of a wider industry trend, as steel companies battle falling demand, with global leader ArcelorMittal announcing last month a temporary output cut of 30 per cent, up from an initial 15 per cent, as it forecast a weaker final quarter.

Dutch trade unions were consulted and agreed with Corus' decision to reduce working hours, Schiethart said.

To qualify for the work-reduction scheme, companies in the Netherlands must have reported a 30 per cent decline in sales in the past two months.

Ministry spokesman Riphagen said 45 applications have been lodged for the work reduction scheme so far, primarily from companies in the metal, electronics and transport sectors.