Caterpillar is planning another round of job cuts that could exceed 10,000 people through 2018, as the construction and mining equipment maker adjusts to downturns in key markets that it serves.
That could amount to more than 8 percent of the 126,800 employees it had globally as of June.
The Peoria, Illinois, company said Thursday that it will cut as many as 5,000 people mostly by the end of this year from its salaried and management workforce. It then could cut thousands more, raising the total cuts above 10,000, as it figures out which factories and manufacturing sites to close through 2018.
Caterpillar said it faces challenging conditions in key sectors. Company officials said in a statement that industries like mining, oil and gas, construction, and rail have a history that sometimes includes prolonged downturns, but they are the right businesses to be in for the long term.
Caterpillar also said Thursday that it was dropping its 2015 revenue forecast by $1 billion to about $48 billion, and it says sales for 2016 should be about 5 percent lower.
Analysts expect, on average, revenue of 48.93 billion this year, according to FactSet.
The company didn’t update its profit forecast for 2015, but it noted that the lower sales outlook and higher restructuring costs will hurt profit. It said it would provide an update when it releases third-quarter results in late October.
The company said the job cuts and other expense reductions are expected to help lower operating costs by around $1.5 billion. Caterpillar has trimmed its total workforce by more than 31,000 since the middle of 2012.
Caterpillar shares dropped 6.2 percent, or $4.37, to $65.85 in midday trading Thursday, while broader indexes dropped more than 1 percent.
In other news, the company also acknowledged that in light of the cuts, Caterpillar says now isn’t the time to start construction on its new world headquarters in downtown Peoria.
Caterpillar had announced in February that it planned to build a new, multi-building headquarters in downtown Peoria.
But when construction would start remains unclear.
Caterpillar spokeswoman Rachel Potts tells the (Peoria) Journal Star that “given the current conditions, now is not the time to start, and we cannot say now when that will happen.”
However, Potts says Caterpillar remains committed to Peoria and Illinois and its hopes for downtown Peoria haven’t changed.