Columbus-based Cummins Inc. plans to reduce its salaried workforce by about 2,000 employees worldwide by the first quarter of next year in response to a business slowdown, the company confirmed to IBJ on Monday.
Cummins announced the news to its employees on Thursday, said company spokesman Jon Mills, adding that the company hasn’t yet identified which locations will be affected.
The engine manufacturer has about 62,600 employees, including about 10,000 in Indiana. The terminated employees make up about 3.2% of the company’s workforce.
The layoffs are part of a wider cost-cutting plan in which the company expects to reduce its annual expenses by $250 million to $300 million by the first quarter of next year in response to market forces.
Last month, Cummins lowered its full-year financial guidance after missing quarterly revenue and profit expectations. Its third-quarter revenue of $5.8 billion was down 3% from the same period a year earlier. Profit came in at $622 million, or $3.97 per share, down from $692 million, or $4.28 per share, in the same period a year earlier.
The company said its full-year 2019 revenue is expected to decline 2 percent, down from the previous guidance of flat revenue. It also said it expects full-year earnings before interest, taxes, depreciation and amortization to be in the range of 15.9% to 16.3% of sales, down from previous guidance of 16.25% to 16.75%.
“We’ve noticed that demand is deteriorating faster than we expected, and so we took a number of measures to adjust to that,” Mills said.
In addition to the layoffs, Mills said, Cummins has offered voluntary retirement packages to eligible U.S. and United Kingdom employees; reduced the size of its temporary workforce; restructured its supply chain; and prioritized or reduced spending on some projects and programs.