Caterpillar Inc said Friday it is laying off an additional 2,110 workers, bringing the week’s total to about 22,000, as the company scrambles to cope with a downturn in demand for its construction and mining equipment.
The latest cuts affect plants that build products for the mining and energy industries, customers that had helped sustain Caterpillar as other key markets, like residential construction, swooned.
The recent dramatic pullback in commodity and oil prices has forced those customers to rethink their plans for investment in new equipment.
The announcement of 2,110 more layoffs caps the worst week for Caterpillar employees since the mid-1980s, when the Peoria, Illinois-based company was losing $1 million a day and slashing jobs on a similar scale just to keep its doors open.
On Monday the company said it was cutting nearly 20,000 jobs and warned of a tough year ahead, with worldwide economic weakness gutting orders for it earth-moving equipment.
The production employees affected by the latest cuts work at three plants in Illinois — in Aurora, Decatur and East Peoria — that make wheel loaders, hydraulic excavators, off-highway trucks, track-type tractors and pipelayers.
Caterpillar said 416 support and management employees in Aurora, Decatur and East Peoria were also being laid off. It said these cuts were included in the tally released Monday.
“Over the last few months, recessionary conditions have had a very negative impact on our customers and we must drastically reduce our production levels and cost structure in order to remain competitive for the long run,” Bob Williams, Caterpillar’s vice president for the Americas Operations Division, said in a statement.
The company said the layoffs would begin on April 13.
In an unprecedented move, Caterpillar recently reopened its order book and invited big customers and dealers to cancel or postpone some orders. The company was reported to be stunned by the response.