A factory closure programme could lead to total redundancies reaching 10,000 by 2018, the company said.
The redundancies and closures will cost Caterpillar US $2bn in severance payments and closure expenses, but will reduce operating costs by $1.5bn a year once fully implemented.
2015 revenues are now expected to be about $48bn, or $1bn down on previous expectations. For 2016, sales and revenues are forecast to fall a further 5%. This year is the company’s third consecutive down year for sales and revenues, and 2016 would be the first time in Caterpillar’s 90-year history that revenues have decreased four years in a row.
More than 20 factories are being considered for closure or consolidation, representing more than 10% of manufacturing square footage.
“We are facing a convergence of challenging marketplace conditions in key regions and industry sectors – namely in mining and energy,” said chairman and CEO Doug Oberhelman. “While we’ve already made substantial adjustments as these market conditions have emerged, we are taking even more decisive actions now.”
Caterpillar has already closed or announced plans to close or consolidate more than 20 facilities since 2013 and shed 31,000 employees since mid-2012.