US construction and mining equipment firm Caterpillar has announced it is to permanently sever ties with 2,500 employees.

The world’s largest construction and mining equipment manufacturer Caterpillar has announced the axing of 2,500 permanent jobs in the US.

In the statement released yesterday (26 October), Caterpillar announced plans to “selectively align production levels with demand and resource requirements.”

The 2,500 employees being permanently axed had already been laid off but the recent announcement from Caterpillar means that these workers will now receive severance packages. The equipment manufacturer has begun notifying the staff affected.

Caterpillar also stated that approximately 550 laid off staff will return to work at various facilities to meet demand.

During the economic downturn, Caterpillar has cut around 34,000 full-time and contract workers worldwide.

Jim Owens, Caterpillar Chairman and CEO, said: “We are pleased that signs of recovery in the global economy allow us to return a selected group of laid off employees to work.

“But it’s important to remember that we are not close to the record-breaking demand we experienced from 2004 through 2008.”

Last week, Caterpillar reported a profit of $404 million (£245m), which was better than originally predicted. However, the figure is still down 54% from a year earlier.

Caterpillar’s preliminary outlook for 2010 is positive and sales are predicted to rise by 10-25%.