Caterpillar may cut up to 10000 jobs through 2018

Of the $1.5 billion in expected savings, the company says slightly less than half will be the result of lower selling, general and administrative costs, with effects being seen in 2016 across the company.

Caterpillar will also be offering voluntary retirement enhancement program to employees that are qualified, according to the press release.

Consolidating or closing facilities and reducing manufacturing square footage is part of that the plan to reduce costs.

Since 2013, Caterpillar has closed or plans to close more than 20 facilities, reducing its global footprint by eight million sq ft. The company also said revenue is expected to be down about 5% from in 2015 levels next year.

In its announcement on Thursday, the company notes that 2015 will be its third straight year of sales declines. In addition, the company plans to layoff more than 10,000 people by 2018.

Caterpillar is planning another round of job cuts that could exceed 10,000 people through until 2018, as the construction and mining equipment maker adjusts to downturns in key markets that it serves.

The company expects to incur about $2 billion in pretax costs from the restructuring and save about $1.5 billion annually.

Now, Caterpillar expects $48 billion in revenue for 2015 and about 5 percent less than that for 2016. Peoria has been Caterpillar’s home for 90 years and we know this is especially difficult and hard for our local employees, families and communities.

Earlier in the month, Caterpillar received a downgrade from Robert W. Baird to neutral from outperform on volatility concerns in China and expectations that the company’s bookings are not likely to rebound over the next few quarters.

Caterpillar shares were down 7 percent at $65.21 in morning trading.

“When they finally went negative in energy, they said ‘We have to bite the bullet, ‘” Ubelhart said in an interview Thursday. “While we’ve already made substantial adjustments as these market conditions have emerged, we are taking even more decisive actions now”, Chairman and CEO Doug Oberhelman said.

Caterpillar is a leading manufacturer of construction, farming and mining equipment.

But the company also had kept a more positive outlook than its competitors about its end markets for much of this year, said Kwame Webb, an analyst who covers Caterpillar for Morningstar.