Equipment Manufacturers Slash Jobs to Stay Afloat in the Poor Economy

Published By : 25 Sep 2015 | Published By : QYRESEARCH

Caterpillar Inc cut down its revenue forecast and announced its plan to slash 10,000 jobs by 2018. With this move the company has yet another enterprise to be at the receiving end of mining slowdown. The news rattled the Caterpillar shares by 8%, which was an eight year low. Shares of Caterpillar tumbled as much as 8 percent to a five-year low, bringing the sector down by 37 points on the industrial average of Dow Jones.

The plummeting prices of copper, iron ore, and crude oil and slowing economy of China has resulted in energy companies and miners reducing their budgets and deferring their expansion plans. Following this trend, the equipment orders have also reduced. The worst news regarding this scenario has been Peoria’s drop in production, who is the biggest manufacturer of Caterpillar. 

Jim Corridore, S&P Capital IQ analyst stated that these changes are a strong reaction to the ongoing market conditions. He further added that the Caterpillar has registered poor growth patterns in the past few years along with a sharp decline in the earnings. This has pressurized CEO of Caterpillar to come up with a better way of dealing with situation, which shows no signs of improvement.

Treading the same path, Joy Global Inc, manufacturer of mining equipment issued a warning about the profit as the company is struggling to float amidst slowdown of demand for its services. On a similar note, the biggest farm equipment maker, Deere & Co (DE.N) also announced that it will cut over 300 jobs this January due to drop in the grain prices, which has negatively impacted the demand for agricultural machinery.

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