Cummins to slash 2,000 jobs due to weak demand
Company said the job cuts are expected to save up to $200 million a year.
COLUMBUS, Ind. — Cummins plans to slash up to 2,000 jobs, almost 4% of its workforce, due to weaker demand for its engines. The company said it expects the weakness to continue and cut its revenue outlook for the year.
Shares of the Columbus, Indiana, company fell to its lowest point in nearly three years.
The job cuts, which are expected to be completed mostly by the end of the year, represent about 4% of the company’s total worldwide workforce of more than 54,600. The cuts will save Cummins between $160 million to $200 million a year, it said.
Cummins CEO Tom Linebarger said demand in Brazil and China has been low and shows “no signs of improvement in the near-term.” Demand for its generators and engines used in farming and construction equipment has been low and “worsening,” he said.
“Given the uncertainty in the global economy, we expect challenging conditions to persist for some time,” Linebarger said in a printed statement.
The company now expects revenue for the full year to be flat or down as much as 2%. It previously expected revenue to grow 2% to 4%. Analysts expected revenue for the year to rise 4% to $19.99 billion, according to FactSet.
© 2015 The Canadian Press