Caterpillar, the global heavy-equipment manufacturer, has announced cost-cutting measures following weakening sales and deterioration of growth in emerging markets.
In a statement the company said that it would continue to reduce its operations and shut down factories in line with demand.
The company also said it would cut pay for senior managers by five to 35 per cent and reduce the salary of other employees by 15 per cent. Executive compensation will take the largest hit with a reported 50 per cent reduction.
The manufacturer also announced a freeze on recruitment and said it intends to offer an incentive-based voluntary separation programme to a number of its employees in the US.
Despite a recent fall in raw-material prices, outlook for manufacturing firms continues to look grim. A number of firms have cut forecasts in the past month, with Caterpillar predicting profits to remain low in 2009.
Caterpillar’s chief executive, Jim Owens, said: ‘We considered waiting until January to make this announcement, but decided it was better to communicate these plans with our employees as we approach the completion of our 2009 planning process. We also wanted to give employees interested in the voluntary separation plan time to consider this decision and discuss it with family over the holiday break.’