UPDATE 1-Olympic Steel cuts jobs by 21 pct from peak '08 levels

* Says reduced annual expenses by $65 mln

* Says will write down value of inventory

* To record pretax charge of $30 mln

* To cut salaries by between 2.5-10 pct

April 6 (Reuters) - Olympic Steel Inc (ZEUS.O) said it has reduced its workforce by 21 percent from peak 2008 levels and cut salaries due to continued weakness in the economy and the steel market, adding that it will also write down the value of its inventory as of March 31.

The provider of steel products said it had reduced its 2009 annual operating costs by $65 million, or about 35 percent, compared with 2008, through various measures, including company-wide base pay cuts of 2.5 percent to 10 percent, effective March 30, and reduced work hours.

The company said the inventory writedown will result in a pretax charge of about $30 million, or 12 percent of its inventory.

Many companies reduce the book value of their assets because it is overvalued compared to the market value.

"Demand for flat rolled steel remained soft and pricing continued to unexpectedly deteriorate through March 2009," Ohio-based Olympic Steel said.