Major changes are underway at Caterpillar, Inc., as restructuring and cost-reduction steps are expected to help lower operating expenses by as much as $1.5 billion annually, company officials said recently.
“We are facing a convergence of challenging marketplace conditions in key regions and industry sectors – namely in mining and energy,” Doug Oberhelman, Caterpillar's chairman and CEO, said. “While we’ve already made substantial adjustments as these market conditions have emerged, we are taking even more decisive actions now. We don’t make these decisions lightly, but I’m confident these additional steps will better position Caterpillar to deliver solid results when demand improves.”
Changes will begin by year's end and will reflect current market conditions. This year’s sales and revenues were down by as much as $1 billion and are not expected to surpass $48 billion. Next year's sales and revenues are expected to be about 5 percent below 2015.
But revenues are not the only thing down lately, as its workforce also is shrinking. Since 2013, Caterpillar has closed or announced plans to close or consolidate more than 20 facilities, impacting 8 million square feet of manufacturing space, with the company reducing its total workforce by more than 31,000 since mid-2012.