Caterpillar cuts 2,500 jobs, ends some layoffs

October 27, 2009 08:15:40 AM

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US heavy equipment maker Caterpillar said Monday it was cutting about 2,500 jobs and had started to bring more than 500 laid-off employees back to work, in a sign of improving economic conditions.

About 550 furloughed US employees have returned or will return to work before the end of 2010, including support, management and production employees, the company said in a statement.

"We are pleased that signs of recovery in the global economy allow us to return a selected group of laid-off employees to work," said Caterpillar chairman and chief executive Jim Owens.

"But it's important to remember that we are not close to the record-breaking demand we experienced from 2004 through 2008," he said.

Also Monday, Caterpillar began notifying about 2,500 laid-off US employees that they would not be returning to work, without giving details.

"The company is offering a separation package for those employees. A breakdown of impacted employees by location will not be provided."

Since late 2008, Caterpillar slashed 18,700 jobs as the company faced problems amid the financial crisis which slammed the brakes on growth.

The company recently reported third-quarter earnings of 404 million dollars, or 64 cents a share, down 53 percent from a year earlier, as revenue fell 44 percent.

The US economy was expected to have returned to growth in the third quarter of 2009 after slumping into recession in December 2007.