Caterpillar Inc. will cut 20,000 jobs to lower production costs after profit tumbled 32% in the fourth quarter, the company said Jan. 26.
Caterpillar attributed the profit drop to higher operating costs in its machinery and engines division and declines in its financing and insurance services.
For the year, revenue rose 6% to $12.9 billion, and profit remained relatively flat.
In a statement to investors, Owens said the layoffs will be implemented in the first three fiscal months.
"These are very uncertain times, and it's imperative that we focus Team Caterpillar on dramatically reducing production schedules and costs in light of poor economic conditions throughout the world," Owens said. "While it's painful for our employees and suppliers, it's absolutely necessary given economic circumstances. We expect to have most of the actions needed to lower employment and cost levels in place by the end of the first quarter."