A slowdown in key markets is prompting a number of Caterpillar job cuts, which will impact as many as 5,000 workers in the very near future. The Peoria, Illinois-based construction and mining equipment giant plans to issue layoffs in an attempt to reduce costs as the markets the company serves are also seeing lackluster business on their end. The majority of these cuts will hit those in salaried and management positions, and the layoffs will occur before the end of 2015.
Fuel Fix reports that the Caterpillar job cuts could total more than 10,000 as the company decides which factories and manufacturing locations to shut down through the year 2018. Caterpillar employs in excess of 126,000 people globally. Although the heavy machinery and equipment giant has employees around the world, the job cuts will predominately happen within the U.S.
According to the report, spokespersons at Caterpillar’s Texas offices haven’t commented on the cuts and wouldn’t reveal the number of employees that Caterpillar employs in Texas, but there’s a plant in Victoria, which is 125 miles southwest of Houston.
The Caterpillar job cuts were calculated after the revenue forecast was dropped by $1 billion to about $48 billion, and the company also projects that 2016 sales will be about five percent lower. The layoffs and other expense reductions are aimed to help lower operating costs in the range of $1.5 billion.
A downturn in the mining and energy industry is causation for Caterpillar’s position in the current market as it stands. Texas, for example, has struggled in the oil and gas sector throughout 2015.
Fox News adds in its coverage of the Caterpillar layoffs that the company’s shares have fallen 31 percent within the past 12 months and fell 6.7 percent to $65.53 in morning trading.
This report adds that closings could affect over 20 of its operating sites and more than 10 percent of its factory floor space.
Prior to the Caterpillar job cuts announcement, the company revealed that since 2013, it “has closed or announced plans to close or consolidate more than 20 facilities, impacting 8 million square-feet of manufacturing space. In addition, the company already has reduced its total workforce by more than 31,000 since mid-2012.”Caterpillar plans to reveal an update on its 2015 outlook when third-quarter reports are generated in late October.
The company explains that it intends to “revamp its mining business, as well as the company’s dealer and customer-facing divisions as part of the efforts to lower costs.”
This is the third consecutive year that revenue has fallen for Caterpillar.
The Caterpillar job cuts are yet another reminder of how many large corporations of late have to reduce costs and implement layoffs in order to increase profits.
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