Caterpillar, the world renowned makers of earth moving equipment, stated Monday morning that they would be cutting 20,000 jobs in an attempt to lower costs as the recession reduces demand for construction equipment.
In a statement released to media sources the company indicated that “Questions about the depth and duration of the U.S. recession triggered a plan to cut production costs in line with a 25 percent decline in sales volume.”
Company spokesman, Jim Dugan, went on to say that “About 8,000 of the jobs that will be lost are contract workers.” “The cuts include 5,000 management and support positions that had not previously been announced,” continued the Caterpillar representative.
Throughout the U.S.A. the recession has heavily affected housing markets. Property sales are down to their lowest point in years and as a result many new projects are being scrubbed. This elimination of construction opportunities is heavily affecting the job market and is directly responsible for Caterpillars profit loss.
According to Reuters shares of Caterpillar Inc fell more than 10 percent after the company released its quarterly results earlier this morning.
These fourth quarter results indicate that the company’s net income fell from $975 million to $661 million in one quarters time; a 32 percent drop.
“These are very uncertain times,” indicated Caterpillar’s chief executive, James Owens, in a statement “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.”
By: Alberto Ramos Cordero
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