Caterpillar announced Thursday that it expects to permanently reduce its workforce by 4,000 to 5,000 by the end of 2016. It said the cuts could reach 10,000 through 2018.
The reductions are part of a corporate restructuring that the company said will lower operating costs by about $1.5 billion annually once implemented.
Caterpillar also lowered its guidance for 2015, saying sales and revenues for the year are now expected to be about $48 billion—$1 billion lower than the previous outlook. Thursday's announcement also said that expected 2016 sales and revenues will be about 5 percent below this year.
Shares of Caterpillar—which has a market cap of about $42 billion—fell more than 6 percent after the announcement.
Beyond the short-term expected layoffs, Caterpillar said that its total workforce reduction could amount to more than 10,000 people—including possible manufacturing closures through 2018.
"We are facing a convergence of challenging marketplace conditions in key regions and industry sectors—namely in mining and energy," Chairman and CEO Doug Oberhelman said in a statement. "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."