Caterpillar to cut up to 10K jobs through 2018

Caterpillar, which has a large Wisconsin presence following its 2010 acquisition of South Milwaukee-based Bucyrus worldwide Inc., is undergoing restructuring and cost reduction actions due to weakened sales and revenue outlooks.

Caterpillar expects revenue to fall in 2015 for the third straight year, to $US48 billion ($68.4 billion), below the average analyst estimate of $US48.82 billion, as compiled by Thomson Reuters I/B/E/S.

The company will offer a voluntary retirement enhancement programme for qualifying employees, which will be completed by the end of 2015. It expects pretax costs related to severance and termination benefits for its employees and exit costs for the consolidation of its plants to reach around $2 billion.

Those “substantial adjustments” in the past have included closures or scheduled closures of more than 20 plants since 2013 and the laying off of 31,000 workers.

Of the potential 10,000 layoffs, up to half will happen through 2016, the company said.

It is the third successive year the company’s revenues have declined. Caterpillar also sells equipment to the energy industry, which is suffering from lower oil prices.

The company has reduced its total workforce by more than 31,000 since mid-2012.

Caterpillar announced the cuts Thursday, September 24, 2015, roughly seven months after a new headquarters building was slated to be placed downtown Peoria, Illinois.

Caterpillar, the United States maker of construction and mining equipment, has said it could cut its workforce by more than 10,000 by 2018. It’s weighing closing 20 or more facilities – or more than 8 million square feet of manufacturing space.

Shares of Dow member Caterpillar plunged 6.7 per cent to $US65.50 in early trade.

As British mining giant Anglo-American prepared to shave as many as 53,000 jobs, chief executive Mark Cutifani told the Wall Street Journal, “We’re looking at every dollar and pulling everything back”. It said that would not repeat in 2016. A long-standing lack of demand for mining equipment coupled with the more recent dip in sales to the energy sector have proven to be a fairly devastating one-two punch. The underground mining sales and support teams will join the Material Handling and Underground Division, led by Caterpillar Vice President Denise Johnson. The company blamed the cuts on China’s economic slowdown and falling oil prices.

Caterpillar said that as the world economy improved, it strongly believed the need for Cat products and services for infrastructure, mining, commodities, energy and transportation would improve.