Caterpillar cuts 20,000 jobs

By Hal Weizman in Chicago
Published: January 26 2009 13:45 | Last updated: January 26 2009 13:45


Caterpillar, the world’s biggest maker of construction equipment and heavy-duty engines, is cutting 20,000 jobs as it struggles to cope with the global economic downturn.
The action comes a month after the Illinois-based bellwether group slashed executive salaries by up to half and cut 814 jobs from its site in Mossville, Illinois, citing a decline in orders and weaker demand for engines in Caterpillar machines.


The company was one of several in the US to announce job cuts on Monday morning. Sprint Nextel said it would cut 8,000 jobs while Home Depot said it would shed 7,000.
Caterpillar announced the latest round of cuts as it reported that fourth-quarter profits fell by more than 32 per cent and warned that earnings would come under pressure again in 2009.
Caterpillar said profit in the quarter was $661m or $1.08 a share, down from $975m or $1.50 in the same period a year earlier and well below analysts’ expectations of about $1.28.


“Fourth-quarter profit was disappointing,” said Jim Owens, chief executive. “It is now clear that we need to sharply lower our production and costs.”
“These are very uncertain times, and it’s imperative that we focus Team Caterpillar on dramatically reducing production schedules and costs in light of poor economic conditions throughout the world,” Mr Owens said.
“While it’s painful for our employees and suppliers, it’s absolutely necessary given economic circumstances. We expect to have most of the actions needed to lower employment and cost levels in place by the end of the first quarter.
“Financial markets remain under stress, and our expectations for 2009 have deteriorated,” said the company. “Uncertainty around the depth and duration of this recession makes it very difficult to forecast sales and revenues.”