US construction equipment giant Caterpillar announced on Tuesday that it intends to cut about 20,000 jobs worldwide to cope with plunging sales amid a sharp economic slowdown.
The layoffs, equivalent to about 18 per cent of its workforce, came even as the company chalked up its sixth consecutive year of record sales and revenues in 2008.
Some 4,000 production and 7,500 administrative staff as well as about 8,000 contract staff will be among those to be downsized, the company said as it reported 2008 fourth-quarter profit dropped 32 per cent to USD 661 million.
"Fourth-quarter profit was disappointing, particularly in light of record fourth-quarter sales and revenues and a significant favorable tax adjustment," Caterpillar chief executive Jim Owens said in a statement.
The company's fourth-quarter sales and revenues was six partcent higher from the same period in 2007 to USD 12.92.
Its whole year sales and revenues hit a record high of USD 51.32 billion for 2008, up 14 per cent from 2007.
"While 2008 was our sixth consecutive year of record sales and revenues, it was an extraordinarily challenging year," Owens said.
"It is now clear that we need to sharply lower our production and costs, and aggressive actions were triggered in December," he said.
Caterpillar, a top manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines, said its 2009 expectations had "deteriorated" amid uncertainty following a deepening US recession.