Shares in US construction giant Caterpillar tumbled seven per cent after it warned of falling revenues and announced thousands of job cuts.
The company announced today (September 24th) that it plans to reduce its workforce by 4,000 to 5,000 by the end of 2016. It added the cuts could reach 10,000 through 2018.
The company already has reduced its total workforce by more than 31,000 since 2012. It said that it has closed or announced plans to close or consolidate more than 20 facilities since 2013.
"We are facing a convergence of challenging marketplace conditions in key regions and industry sectors—namely in mining and energy," chief executive officer Doug Oberhelman said in a statement. "While we've already made substantial adjustments as these market conditions have emerged, we are taking even more decisive actions now. We don't make these decisions lightly, but I'm confident these additional steps will better position Caterpillar to deliver solid results when demand improves."
"Several of the key industries we serve—including mining, oil and gas, construction and rail—have a long history of substantial cyclicality. While they are the right businesses to be in for the long term, we have to manage through what can be considerable and sometimes prolonged downturns," he added.
The reductions are part of a corporate restructuring which is expected to lower operating costs by about $1.5 billion (£980 million) annually, the company said.
Meanwhile, Caterpillar announced that sales and revenues for the 2015 are now expected to be about $48 billion – $1 billion lower than the previous outlook. It also expects 2016 sales and revenues will be about five per cent below this year.
Caterpillar added it is planning to revamp its mining, dealer and customer-facing divisions in a bid to lower costs.
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