- Heavy equipment manufacturer Caterpillar announced plans Thursday to implement significant cost reductions and company restructuring after facing its third consecutive down year for sales and revenues.
- Caterpillar said the plan — which it expects to result in $1.5 billion in savings when fully in place — includes consolidating and closing several facilities over the next two years and cutting as many as 10,000 positions by 2018.
- The company also announced that plans to build a new headquarters in its home base of Peoria, IL, are currently on hold, and it does not know when construction will begin.
Economists often look to Caterpillar's performance as a "global bellwether" of future growth in a variety of markets, including construction, resource extraction and more, according to Forbes.
If sales and revenue slip again in 2016, it would be the first time the 90-year-old company has seen a four-year streak of decreases.
Caterpillar attributes its declining results to dwindling demand in the energy and construction/extraction industries across the globe. Struggling emerging markets, such as China and Brazil, also contributed to disappointing sales.
The company's CEO and Chairman, Doug Oberhelman, said, "Several of the key industries we serve — including mining, oil and gas, construction and rail — have a long history of substantial cyclicality ... While they are the right businesses to be in for the long term, we have to manage through what can be considerable and sometimes prolonged downturns."
So far this year, the company has cut more than 1,000 jobs through six rounds of layoffs.
Caterpillar's cost reduction plan announcement came just two days after its vice president for mining, Chris Curfman, announced he was retiring after working with the company for 20 years.