The Saskatoon-based company says the decision stems from soft demand for potash and phosphates, two major types of crop fertilizer.
"While these are steps we must take to run a sustainable business and protect the long-term interests of all our stakeholders, these decisions are never easy," PotashCorp chief executive Bill Doyle said.
The cuts come amid lower prices for potash.
The commodity and the companies that produce it have been hit hard this year after Russian-based Uralkali, one of the world's largest potash producers, quit the Belarusian Potash Company export partnership.
In expectation of lower prices on the world markets, China and India — key markets for fertilizer — delayed purchases, sending shipments plunging.
PotashCorp said buyer caution and competitive pressures pushed its average realized price for potash to $307 per tonne in the third quarter, down from $429 per tonne in the same period last year.
However, speculation that the European potash partnership may be renewed has increased in recent weeks following comments by Russian officials that Belarus will send home Vladislav Baumgertner, Uralkali's chief executive, whom it placed under house arrest and accused of harming the Belarusian economy.
The announcement came after former Russian presidential candidate Mikhail Prokhorov said he would buy 22 per cent of Uralkali from billionaire Suleyman Kerimov, who fell out with Belarusian President Alexander Lukashenko.
BMO Capital Markets analyst Joel Jackson said potash and phosphate prices have been declining for months.
"PotashCorp had to decide to increase potash production to take prices closer to marginal costs and attempt to close higher-cost mines, or, instead, balance the market. PotashCorp has chosen to balance," Jackson wrote in note to clients.
"PotashCorp could be signalling to the new owners of Uralkali that PotashCorp will continue to support price over volume in the hope the new owners will follow suit."
The company said Monday the biggest job cuts will be in its home province, where 440 people will be affected.
Most of those will be at its Lanigan division, where one of two mills will suspend production by the end of 2013, and its Cory division, where production will be reduced, and the Saskatoon headquarters.
The Saskatchewan government said it would help those affected find work in other sectors.
"While this is not an insignificant event in the economic life of the province or, more importantly, in the lives of these families, it is important to note that we have an increasingly diversified economy in Saskatchewan, one that has many cylinders firing in the engine," Saskatchewan Premier Brad Wall said in Regina.
Wall noted that BHP Billiton and K+S are building potash mines in the province and their plans have not changed.
"In the meantime, we're not going to just worry about one sector," he said.
"We are going to make sure that we're competitive in that sector, but we are going to focus on the fact that this economy is increasingly diversified and we need to continue those efforts."
In addition to the cuts in Saskatchewan, PotashCorp is cutting 130 jobs in New Brunswick, while the rest will be outside Canada, including more than 435 in the United States.
Florida will lose 350 jobs while another 85 people will be affected in North Carolina.
One of two phosphate plants in White Springs, Fla., and the Suwannee River chemical plant, will be closed. A loss of capacity at White Springs is expected to be partially offset by higher output at Aurora, N.C.
There will another 40 jobs affected in other parts of the United States and in Trinidad.
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