Monday January 26, 11:48 PM
Caterpillar to slash 20,000 jobs
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NEW YORK (AFP) - US construction equipment giant Caterpillar (NYSE: CAT - news) announced Monday that it intends to cut about 20,000 jobs worldwide to cope with plunging sales amid a sharp economic slowdown.
The layoffs, equivalent to about 18 percent of its workforce, came even as the company chalked up its sixth consecutive year of record sales and revenues in 2008.
Some 4,000 production and 7,500 administrative staff as well as about 8,000 contract staff will be among those to be downsized, the company said as it reported 2008 fourth-quarter profit dropped 32 percent to 661 million dollars.
"Fourth-quarter profit was disappointing, particularly in light of record fourth-quarter sales and revenues and a significant favorable tax adjustment," Caterpillar chief executive Jim Owens said in a statement.
The company's fourth-quarter sales and revenues was six percent higher from the same period in 2007 to 12.92 billion dollars.
Its whole year sales and revenues hit a record high of 51.32 billion dollars for 2008, up 14 percent from 2007.
"While 2008 was our sixth consecutive year of record sales and revenues, it was an extraordinarily challenging year," Owens said.
"It is now clear that we need to sharply lower our production and costs, and aggressive actions were triggered in December," he said.
Caterpillar, a top manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines, said its 2009 expectations had "deteriorated" amid uncertainty following a deepening US recession.
"We have initiated actions which will remove about 20,000 workers from our business and every indirect spend dollar will be heavily scrutinized," the company said.
The cuts would be accompanied by substantial reductions in overtime and freeze on hiring and salaries for administrative staff, it said.
The company forecast 2009 sales and revenues to be in "a range of plus or minus 10 percent" from 40 billion dollars.
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