Heavy construction machinery manufacturer Caterpillar Inc. said Monday, Jan. 26, it would cut 20,000 jobs this year through layoffs and buyouts.
The Peoria, Ill.-based company said the job losses would take place in all of its businesses and in all of its facilities. It will cut about 4,000 production employees and around 7,500 management and support staff. Another 8,000 contractors not directly employed by the company will lose their positions. Most of the job reductions will happen in the first quarter.
The 12,000 company jobs represent about 11 percent of the company’s total workforce. Caterpillar currently employs about 113,000 workers.
Caterpillar expects conditions to worsen in 2009, Jim Owens, Caterpillar chief executive, said. The company is shedding the 20,000 jobs because it sees the need to lower costs in anticipation of a 25 percent reduction in sales this year.
After a strong first three quarters of 2008 led by mining and energy, the company was “whipsawed” in the fourth quarter as its key markets were hit by a rapidly deteriorating global economy and falling commodity prices, Owens said.
The company said 2009 will be one of its weakest years since World War II.
Last June, Caterpillar said it will leave the North American Class 8 truck engine market by 2010. It will continue a severe-duty truck and engine partnership with Navistar International Corp.
