Page last updated at 18:23 GMT, Monday, 26 January 2009

Caterpillar reveals huge job cuts

Caterpillar machine
The firm expects 2009 to be "very tough"

US construction and mining equipment maker Caterpillar has taken steps to cut around 20,000 jobs, amid falling sales and profits.

It said 5,000 jobs will be reduced in the first quarter, while around 15,000 jobs have already been eliminated.

It employs 112,000 people worldwide, including 10,000 people in the UK.

The majority of the job cuts will be in support and management, but the company is also implementing a shortened working weeks and factory shutdowns.

More details about where the cuts will fall are to be released by the company in the next few weeks.

It is the latest big firm to announce massive job cuts. On Monday alone, companies worldwide said they planned to eliminate more than 50,000 jobs.

'Very tough year'

GLOBAL JOB CUTS
Caterpillar - 20,000
ING - 7,000
Philips - 6,000
Corus - 3,500
Home Depot - 7,000
Pfizer/Wyeth - 20,000
General Motors - 2,000

"Without a doubt, 2009 will be a very tough year," chief executive Jim Owens said in a statement.

Caterpillar's fourth-quarter net income fell 32% from a year ago to $661m (482m) amid higher operating costs and a drop in its financial unit's profit.

"Fourth-quarter profit was disappointing, particularly in light of record fourth-quarter sales and revenues and a significant favorable tax adjustment," Mr Owens said.

"We knew Caterpillar was going to be a disaster. We just didn't know the magnitude of it. And it's ugly," said Eli Lustgarten, an analyst at Longbow Research.

For 2009, Caterpillar expects sales to be "in a range of plus or minus 10% of $40bn," significantly lower than its record sales of $51.3bn in 2008.

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