DOW JONES NEWSWIRES

Caterpillar Inc. (CAT) said it would cut 2,110 more workers at three manufacturing plants in Illinois beginning April 13 as the heavy-machinery maker looks to bring production in line with demand.

The layoffs are in addition to the 20,000 job cuts Caterpillar announced Monday.

Caterpillar's shares were down 1.1% at $31.50 in premarket trading.

Caterpillar will lay off 500 production workers at its Aurora, Ill., plant, which makes wheel loaders and hydraulic excavators; 1,026 production workers at its Decatur, Ill., plant, where off-highway trucks, motor graders and wheel tractor scrapers are made; and 584 production employees at its East Peoria, Ill., plant, where it makes track-type tractors and pipelayers.

The company will also cut 416 support and management employees at the three plants. These layoffs are included in the cuts announced Monday.

Caterpillar said more layoffs may be required as the year unfolds, depending on demand and other business conditions.

The company has also said recently it will impose a hiring freeze and suspend salary increases for most support and management employees, reduce pay for executives and senior managers, cut back its capital spending, and cut back overtime work and work weeks at some factories. It has also said it will fully or partly shut down some plants.

Monday, Caterpillar reported net income fell 32% on a steep drop in demand as customers canceled orders.

The company had been averse to cutting jobs, and its layoffs of 800 workers at an Illinois plant last month marked the first time the company has cut full-time workers on a large scale for an indefinite period since early this decade.

The company had benefited from a five-year boom led by emerging markets in big need for the heavy construction equipment made by Caterpillar. During that time, the work force expanded nearly 50% to 101,000 as revenue more than doubled.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; kerry.grace@dowjones.com

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