Alcoa Inc said it will slash its dividend by 82 percent, issue stock and convertible notes worth about $1.1 billion and trim its 2010 spending to help weather the steep downturn in aluminum demand.

The move sent Alcoa's shares tumbling 10 percent to $5.50 in after-hours trade as investors again punished the stock that had fallen to 21-year lows earlier this month.

With the dividend cut, Alcoa joins other blue chip companies such as General Electric and Dow Chemical in chopping its quarterly payout to shareholders amid the worst US recession in decades.