US manufacturing giant Caterpillar announced a major cost-cutting program Thursday that could shutter more than 20 facilities and eliminate more than 10,000 jobs.
Caterpillar, which manufactures heavy industrial equipment, said it will cut 4,000-5,000 jobs by the end of 2016 and could eliminate more than 10,000 positions through 2018, about nine percent of the company's workforce.
The moves are a response to weakness in the mining and energy sectors, two of Caterpillar's core areas.
The cuts will result in annual savings of $1.5 billion.
"We are facing a convergence of challenging marketplace conditions in key regions and industry sectors -– namely in mining and energy," said Caterpillar chief executive Doug Oberhelman.
"While we've already made substantial adjustments as these market conditions have emerged, we are taking even more decisive actions now."
Caterpillar also cut its 2015 sales forecast by $1 billion to $48 billion, much below the 2014 level of $55.2 billion.
Caterpillar said 2015 will be the third year in a row of lower revenues. If revenues also fall in 2016, that will be the first time in the company's 90-year history of four straight revenue declines.
The latest round of cuts are on top of earlier moves to eliminate 31,000 jobs and close or consolidate more than 20 facilities over the last three years.
Oberhelman said both energy and mining are cyclical industries.
"While they are the right businesses to be in for the long term, we have to manage through what can be considerable and sometimes prolonged downturns," he said.
Shares of Dow member Caterpillar plunged 6.7 percent to $65.50 in early trade.