US-based mining and construction equipment manufacturer Caterpillar is set to reduce its workforce by 4,000 globally by the end of 2016, with a total possible workforce reduction of more than 10,000 by 2018.

The jobs are being cut as part of company’s latest cost reduction plan, with redundancies set to begin in towards the end of this year, aimed at minimising operating costs by $1.5bn per year.

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This year, the company’s sales and revenues are expected to be around $48bn, or $1bn lower compared with the previous outlook of $49bn.

According to Caterpillar, the remaining cost reductions will come from lower period manufacturing costs, including savings from additional contemplated facility consolidations in addition to closures of more than 20 facilities.

"We are facing a convergence of challenging marketplace conditions in key regions and industry sectors, namely in mining and energy."

A portion of reductions are expected to take effect in 2016.

Caterpillar chairman and CEO Doug Oberhelman said: "We are facing a convergence of challenging marketplace conditions in key regions and industry sectors, namely in mining and energy.

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"While we’ve already made substantial adjustments as these market conditions have emerged, we are taking even more decisive actions now.

The company has either shutdown or announced plans to close or consolidate more than 20 facilities since 2013.

Since mid-2012, more than 31,000 employees have been made redundant.

Oberhelman added: "Several of the key industries we serve, including mining, oil and gas, construction and rail, have a long history of substantial cyclicality. While they are the right businesses to be in for the long-term, we have to manage through what can be considerable and sometimes prolonged downturns."

In August, the company announced plans to reduce 475 jobs citing weak revenues from global mining and construction activities.