Caterpillar Inc., concerned about declining profits and a dismal sales forecast, says it will cut nearly 20,000 jobs.
Quarterly earnings dropped more than 32 percent in the fourth quarter of 2008. Although sales rose 6 percent in 2008, the company warns that profits in 2009 would be under severe pressure. Makers of such earth-moving equipment as excavators, dump trucks, and bulldozers, Caterpillar is now facing a drop in spending by their energy and mining customers globally. Recent actions by competitors CNH Global NV and Komatsu Ltd. confirm that global demand for construction and mining equipment took a sharp turn down in the fourth quarter.
Caterpillar expects to let go about 17,000 workers and buy out 2,500 others to reduce costs in the face of what it predicts will be its weakest year for business since the end of World War II.