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CHICAGO, March 31 (Reuters) - Caterpillar Inc said on Tuesday it would withhold annual salary increases for senior executives, managers and salaried employees to contain costs due to the impact of the coronavirus epidemic on its business.
The move comes days after the world’s biggest construction and mining equipment maker withdrew its earnings guidance for 2020 and suspended some operations, citing uncertainty caused by the pandemic that has dented equipment sales and hit supply chains.
More than 3,700 people have died from the respiratory disease in the United States. The total confirmed U.S. cases on Tuesday rose to 184,000, up 21,000 from the previous day.
Governors of more than 30 states have ordered people to stay at home to contain the virus, a move that has strangled the economy and left millions without a paycheck, at least temporarily.
Caterpillar said while it does not yet know the full impact of the economic uncertainty on its business, it needs to act with a “sense of urgency” to respond to this “extremely challenging” situation.
“These decisions are difficult and were not made lightly,” the company said.
As a result, Caterpillar said it will not pay out bonuses to eligible employees next year.
Its shares closed up 3.9% at $116.04. (Reporting by Rajesh Kumar Singh; Editing by Chris Reese and Dan Grebler)