Myles Udland
September 24, 2015
On Thursday, the industrial giant announced that it will cut up to 10,000 jobs as part of a restructuring plan in the face of what it called, "a convergence of challenging marketplace conditions in key regions and industry sectors namely in mining and energy."
In early trading on Thursday, shares of the company were down over 7%.
Year-to-date, the stock is down about 25%.
Caterpillar is seen as a bellwether for the global economy because its equipment is big, expensive, and often the kind of investment a company only makes when they feel confident about their prospects and the global economy.
Additionally, Caterpillar has been seen as one of the leading indicators on China's economic slowdown given the decline in the company's sales in that region over the last several years. This news out of Caterpillar follows a warning earlier this week from its UK-based rival, JCB, that it would cut jobs due to a slowdown in Russia, China, and Brazil.
In its announcement on Thursday, the company notes that 2015 will be its third straight year of sales declines. And with sales also expected to decline in 2016 to around $48 billion, the company could be looking at its first four-year stretch of sales drops in its 90-year history.
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I’ve seen other articles that mention other big layoffs like HP. HP’s problem is more HP than global economy but the CAT moves should be of concern I would think.
This bodes badly for my area as Caterpillar is the largest employer here with Kimberly Clark second. The economy hasn’t been good for business but if there are many lay offs here it will be devastating. Caterpillar was considering moving out of Peoria to here because of the Unions.