US earthmoving equipment giant Caterpillar Inc said yesterday that it would lay off additional 300 employees at the company's Decatur plant in Illinois by July.
Together with the cut of 460 jobs at the facility announced last month, the total layoffs now will become 760, or about 20 per cent of the plant's total workforce.
"Products built in Decatur are used in the mining industry, which has witnessed weaker market conditions when compared to last year," the company said in a statement.
"Ultimately, with the softening in this sector, we must take steps to bring production in line with demand," it further said.
The Decatur plant produces engine liners and engine blocks for the mining equipment.
Slower than anticipated growth in the US and China and continuation of the European debt crisis have resulted in poor demand for natural resources and several mining companies have cut down their capital expenditure plans thereby affecting the demand for the mining machinery.
The company said the workers affected by the latest announcement work in production and support / management roles, with the majority in the production workforce.
Peoria, Illinois-based Caterpillar, which reported $66 billion revenue in 2012, last week revised down its 2013 outlook to $57-$61 billion from $60-$68 billion, anticipating slow growth in the world economy.
Particularly, the new outlook reflects a sales decline of about 50 per cent from 2012 for additional machinery used in mining and a decline of about 15 per cent for sales of machines from the Bucyrus acquisition, the company said.
However, expectations for the company's construction industries and power systems segments have not changed.
Last week, Caterpillar reported its first quarter results with a 45 per cent drop in profit compared to a year ago. Revenue for the quarter fell 17 per cent to $13.2 billion.
Reduction in inventories in the first quarter by the company and its dealers coupled with poor demand has resulted in the drop in revenue, according to the company's chairman and chief executive officer Doug Oberhelman.
However, operating cash flow has improved during the quarter enabling the company to resume stock purchases, he said.