Photo by Justin Sullivan/Getty Images(NEW YORK) — Caterpillar Inc. plans to reduce its staffing by 4,000 to 5,000 by the end of 2016, the company said in a press release.
The employee reduction is part of an effort to restructure the company and reduce costs. Weak revenues in 2015 could come in $1 billion lower than anticipated, and revenues in 2016 could be five percent below this year.
Qualifying employees will be offered a “voluntary retirement enhancement program,” with that aiming to be completed by the end of 2015. The company will also cut costs by lowering manufacturing costs through consolidating and closing facilities. As many as 20 facilities could be impacted, the company says.
In total, Caterpillar’s workforce could be reduced by over 10,000 by 2018.
“We are facing a convergence of challenging marketplace conditions in key regions and industry sectors,” Caterpillar Chairman and CEO Doug Oberhelman said.
This year is the third in a row in which Caterpillar has seen sales and revenues decrease. If that happens again in 2016, it would be the first time in the company’s 90-year history that sales and revenues dropped for four consecutive years.
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