The last time Caterpillar Inc. cut thousands of jobs, a mining slowdown was to blame. Now the main culprit is oil, as slumping prices batter drillers.
On Thursday, the world’s most valuable machinery producer announced a plan to cut as many as 10,000 jobs, or 9 percent of its workforce, through 2018 as the effects of crude’s collapse ripple through industry.
The measures, including the second reduction in sales guidance in two months, represent the biggest round of cuts since 2013, when the company reduced its head count by 13,000 as sales to metal producers declined along with prices.
The announcement marks a capitulation to a prolonged downturn in energy markets, the segment that had helped shield Caterpillar’s earnings as mining slumped and construction growth remained tepid, according to Karen Ubelhart, an analyst at Bloomberg Intelligence in New York.
The Peoria, Ill.-based company will cut as many as 5,000 workers this year and another 5,000 by 2018. It reduced a 2015 revenue projection by $1 billion and said sales are expected to drop 5 percent next year.
