Caterpillar, the world’s largest heavy equipment maker has announced that it terminated 120 temporary workers at its Texas plant.

This cut in USA jobs at its Texas facility follows sagging sales stemming from the U.S-China trade war. The new layoffs were implemented in the hydraulic excavator facility in Victoria on Nov. 1 where 820 employees are working.

Confirming the layoffs, a company spokeswoman Kate Kenny said on Monday the decision was connected with “market conditions.”

According to reports, sales in Asia-Pacific fell 13 percent after demand in China suffered and competitive pressure from rivals increased. Revenue in the North American market also fell almost 3 percent.

In October, the engineering giant said it was taking steps to cut production after sales fell in many product segments and regions in the last quarter.

Cater Pillar caters to the capital goods industry with a range of machinery that feeds multiple end-user industry groups.

Among the competitors of Caterpillar include Cummins, CNH Industrial, MAN Energy Solutions and Xtek. Caterpillar stock was up 1.7 percent in the last trading session.

Trade tensions hurting the business outlook

According to the Illinois-based manufacturer, the ongoing trade tensions have affected capital expenditures, slimmed quarterly profits and hurt the full-year profit outlook.

Caterpillar expects the uncertainty will continue and slashed sales are anticipated this year.

According to an assessment by Moody’s Analytics, the trade war has affected almost 300,000 jobs in the United States.

The Caterpillar spokesperson declined to comment on whether production cuts would cause more workforce reduction in other facilities.

Caterpillar had the strongest global growth in 2018 since 2010.

According to Henry Guajardo, who owns Workforce Solutions - a workforce development agency, most of the sacked employees are production workers.

Caterpillar alerted the agency about the layoffs and many workers approached Henry and sought his help for new placements.

A farm equipment maker Deere & Co also laid off 163 manufacturing workers in October.

Meanwhile, reports said Caterpillar workers in the United Kingdom have also been affected.

Caterpillar shares were under pressure after it slashed its profit forecast, citing global economic uncertainty
Caterpillar shares were under pressure after it slashed its profit forecast, citing global economic uncertainty AFP / JEWEL SAMAD

According to a news report, workers hired through recruitment agency Randstad have been terminated.

Caterpillar UK refused to confirm the exact numbers, but it is assumed more than 250 people have lost jobs.

A company spokesman said: “Caterpillar notified Randstad of the need to release agency workers from the Peterlee, United Kingdom facility.”

The Peterlee site is a worldwide source for articulated trucks and machines.