Caterpillar Inc. yesterday said that it will close five plants in the US and cut around 820 jobs as one of the world's biggest construction-equipment maker continues to cut costs due to falling demand.
Last September, the Illinois-based company outlined a strategy that included reducing workforce by around 10,000, and shutter or consolidate around twenty facilities by the end of 2018.
Caterpillar yesterday said that so far it has cut around 5,300 jobs from a global workforce of around 11,400.
''These decisions enable the company to be more efficient and better utilize its manufacturing assets,'' the company said in a statement.
Caterpillar will shutter its plants at Jacksonville - Florida, Morganton – North Carolina, Oxford - Mississippi, and two in South Carolina.
Operations of these plants will be merged into other company plants or will be given to parts suppliers outside Caterpillar during the next 12 months to 18 months.
The company will also demolish a near vacant engine manufacturing building in Mossville, Illinois, to save money.
Revenue was down to $9.46 billion during the first-quarter of 2016, compared to last year's $12.7 billion, while operating profit declined from $1.7 billion during the first-quarter of 2015 down to $494 million.
More specifically, Asia/Pacific sales declined 23 per cent due to declining demand for energy and transportation applications and products used in mining, while sales plunged even worse in Latin America where Caterpillar posted a 43 per cent decline during the first-quarter, mostly due to economic weakness in Brazil and Mexico.
Caterpillar now expects sales and revenue to be between $40 and $42 billion for 2016, down from its earlier estimate of between $40 billion and $44 billion. The company posted revenues of $55.2 billion last year.