Caterpillar aims for $1.5 billion in annual cost reductions
“We are facing a convergence of challenging marketplace conditions in key regions and industry sectors – namely in mining and energy,” Caterpillar Chairman and CEO Doug Oberhelman said. “While we’ve already made substantial adjustments as these market conditions have emerged, we are taking even more decisive actions now. We don’t make these decisions lightly, but I’m confident these additional steps will better position Caterpillar to deliver solid results when demand improves.”
Changes will begin by year-end and reflect current market conditions. This year’s sales and revenues were down as much as $1 billion and are not expected to surpass $48 billion. Next year, sales and revenues are expected to be about 5 percent below 2015.
But revenues are not the only thing down this year, as the number of Caterpillar employees has also shrunk over the years.
Since 2013, Caterpillar has closed or announced plans to close or consolidate more than 20 facilities, impacting 8 million square feet of manufacturing space. The company has also reduced its workforce by more than 31,000 employees since mid-2012.