UPDATE 1-A.M. Castle seeks to further reduce costs

* To implement reduced work weeks and furloughs

* To suspend its 401(k) contributions

* Executives to take a 10 percent pay cut

* Slashes its 2009 capex budget to $3 million

April 15 (Reuters) - A.M. Castle & Co (CAS.N) said it would suspend its 401(k) contributions and its executives would take pay cuts of at least 10 percent as it seeks to further reduce costs.

The specialty metals and plastics distribution company also expects to lower payroll costs through a combination of reduced work weeks and furloughs, and sees total cash compensation reduction of about 20 percent from its initiatives.

The company, which had in March expected to save $45 million from its cost-cutting measures, now expects to reduce its full-year operating costs by at least $65 million.

The company slashed its 2009 capital expenditure budget to $3 million from its earlier estimate of $10 million.

"While we have already taken numerous measures to reduce costs, continued decline in demand requires us to take further steps to better position ourselves for success once the economy recovers," Chief Executive Michael Goldberg said in a statement.

Shares of the company closed at $10.39 Wednesday on New York Stock Exchange. (Reporting by Sakthi Prasad in Bangalore; Editing by Deepak Kannan)