Cummins plans to ‘streamline’ operations, cut jobs after 2023 buyouts
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Columbus-based Cummins Inc., which late last year offered voluntary buyouts to some of its salaried employees, now plans to make further reductions to its workforce.
Company spokeswoman Lauren Daniel told IBJ she could not share specifics on how many jobs the engine manufacturer will be cutting, but she said the reductions are related to Destination Zero—the company’s previously announced goal of achieving zero emissions by 2050, including interim goals by 2030.
Daniel said via e-mail that Cummins is “evolving our operating system so that we can meet the challenges of our Destination Zero strategy and to help our customers as their needs evolve through the energy transition. To do this, we are streamlining how we support and manage our business going forward—simplifying and clarifying how we work to further enhance our performance and position us for the future.”
Daniel wrote that the streamlining will eliminate some positions, and other employees might see “reporting, responsibility or role changes.”
Founded in 1919, the manufacturer has about 75,500 employees worldwide. It counted 10,500 employees in Indiana as of mid-2023, making it the 14th largest employer in the state, according to IBJ research.
In November, Cummins announced it was offering voluntary retirement and voluntary separation to eligible salaried employees because of an expected slowdown.
“We’re not seeing any precipitous drop-off, but we think it’s wise to take some cost-cutting actions here in [the fourth quarter], and then continue to monitor the situation,” CEO Jennifer Rumsey said during the company’s third-quarter earnings call in November. “And if we need to take further action, of course we would continue to do that.”
At the time, the company said it had not set a number for how many employees it expected to take the offer. Employees had until Nov. 26 to apply for those buyouts.
In its first-quarter financial report, released last month, Cummins said it expects its full-year 2024 revenue to decline between 2% and 5% as compared with 2023. Last year the company reported full-year revenue of $34.1 billion.
In December, Cummins announced it had reached an agreement to settle an environmental dispute with the federal and California state governments. Environmental officials alleged that Cummins had unlawfully altered about a million pickup truck engines to bypass emissions tests. Cummins agreed to settle the case but did not admit to any wrongdoing.
The $2 billion settlement—the largest ever reached under the federal Clean Air Act—was finalized in April. Cummins said in its first-quarter financial report that it expected to pay most of that amount in May.
Rumsey sent a company-wide note to employees on Tuesday emphasizing that the changes at the company are not related to the emissions settlement, Daniel said.
Rumsey “also emphasized that we are focused on protecting the strengths of our culture and values while embedding critical culture shifts focused on clarifying and prioritizing work, deciding and executing swiftly and driving accountability for outcomes,” Daniel said.
Cummins shares were down about $3.80—or 1.35%—to about $280 in late morning trading on Tuesday. Since Jan. 1, shares have risen about 17%.