US heavy equipment maker Caterpillar has said that it is implementing 'significant compensation reductions' for employees, freezing hiring and offering redundancies as a way to cope with the economic slump.
The company, seen as sensitive to the economy, said executive pay rates will decrease 'up to 50%' in 2009.
'Compensation for senior managers will be reduced 5-35% and other management and support staff will see a reduction of 0-15%,' the US firm said.
Caterpillar is also offering management and support employees in the US 'an incentive-based voluntary separation programme' available until January 12.
'We understand these decisions will disrupt the lives of many of our employees and their families, and we regret the need to take these steps,' said Caterpillar chairman and CEO Jim Owens.
'We considered waiting until January to make this announcement, but decided it was better to communicate these plans with our employees as we approach the completion of our 2009 planning process. We also wanted to give employees interested in the voluntary separation plan time to consider this decision and discuss it with family over the holiday break,' he added.
Caterpillar said it is taking other measures such as temporary factory shutdowns and layoffs 'on an as-needed basis in response to economic conditions that impact the markets for its products.'
