Anticipating a full-blown global recession Caterpillar is to cut a fifth of its workforce.
Including lay offs already announced, nearly 20,000 jobs will go at the world’s largest maker of construction and mining machines. Caterpillar which has just reported lower-than-expected fourth-quarter profit – down by a third – said it has to cut jobs to reduce costs. In what one analyst called “a very pessimistic outlook in terms of the world economy” Caterpillar said it believes that this will be the weakest year since the end of World War II. As it slashed its outlook for 2009 the company seemed to raise the possibility that it would report a loss in the current quarter. It is freezing the wages of most employees and significantly reducing the total compensation of executives and senior managers.