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PITTSBURG (US): Heavy equipment maker Caterpillar Inc announced 2,110 new job cuts as it scales back production amid a world economic slowdown.

The world's largest maker of mining and construction machinery yesterday said the layoffs at three Illinois plants, in Aurora, Decatur and East Peoria, and other cost-cutting measures were needed to maintain competitiveness.

Like other big manufacturers, Caterpillar has seen key markets undercut by weaker sales of large equipment as companies reduce spending. The layoffs added to 20,000 job cuts announced earlier this week.

On Monday, the Peoria, Ill, company reported a 32 percent drop in fourth-quarter profit as slumping commodity prices, tight credit markets and a decline in construction hurt orders for its backhoes, tractors and other machines.

Mr Bob Williams, Caterpillar's Vice President for the Americas Operations Division, said in statement that “over the last few months, recessionary conditions have had a very negative impact on our customers,” and the company “must drastically reduce our production levels and cost structure to remain competitive for the long run.”

Caterpillar, with about 113,000 employees worldwide, has expanded dramatically in recent years, helped by surging demand from infrastructure-building in developing countries. Its total employment grew by 11,500 people in 2008.

The latest reductions include 500 production workers in Aurora, where Caterpillar makes wheel loaders and hydraulic excavators; 1,026 production workers in Decatur, where the company makes off-highway trucks, motor graders and wheel tractor scrapers, and 584 production workers in East Peoria, where Caterpillar makes track-type tractors and pipe layers.

Caterpillar said it notified the employees yesterday of the permanent layoffs scheduled to begin in April.

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