Some local Cummins Inc. employees could be facing job cuts or other changes to their roles as the company looks to streamline operations and “meet the challenges” of its efforts to reach zero emissions, company officials said.
Cummins spokeswoman Lauren Daniel told The Republic that some employees “may experience reporting, responsibility or role changes,” while others could be facing “position eliminations” as a result of efforts aimed at “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.”
Destination Zero is the Columbus-based company’s strategy for reaching zero emissions. Currently, it is unclear how many jobs may be cut or which business units or roles will be affected by the changes.
Cummins is headquartered in Columbus and is the largest employer in the city, with about 8,000 employees in the area, according to a previous count provided by company officials.
“We are focused on protecting the strengths of our culture and values while embedding critical shifts focused on clarifying and prioritizing work, deciding and executing swiftly and driving accountability for outcomes,” Daniel said. “As part of this evolution, some of our employees may experience reporting, responsibility or role changes as well as position eliminations. These various changes are occurring across the company, and some will occur in Columbus.”
The changes at Cummins come several months after the company offered voluntary retirements and separation program to certain employees.
In November, Cummins Chair and CEO Jennifer Rumsey told financial analysts during an earnings conference call that the company had “initiated actions to reduce costs in our business, particularly in selling and administrative costs” due to lower forecasted revenues.
In May, Cummins raised its revenue and profitability forecast for 2024 due largely to strong global demand but was still projecting full-year revenue to decline compared to 2023. Overall, the company is projecting that its revenues will decline 2% to 5% this year compared to last year.
“In order to lower costs as we move into next year, we are offering voluntary retirement and a voluntary separation program in select regions and parts of our business to eligible exempt employees,” Rumsey said during the conference call. “We will continue to monitor our markets closely and assess the need for further action while continuing to invest for our future.”
During another earnings conference call in May, Rumsey said the company was “taking steps to reduce cost, optimize our business and position Cummins for continued success in 2024.”
During the same call, Cummins Chief Financial Officer Mark Smith told analysts that “we took some steps to reduce costs in the fourth quarter of 2023 and continue to identify ways to streamline our business going forward leaving us well positioned to navigate any economic cyclicality and continue investing and delivering strong financial performance.”
This past October, Cummins notified the South Carolina Department of Employment and Workforce that it plans to permanently close the 72-worker Cummins Charleston Technical Center by July 31, according to state records. A Cummins spokesperson told the Charleston Post & Courier that the company plans to “relocate some of its operations” but did not disclose where the operations would be moved to.
In May 2023, Cummins Meritor notified the California Employment Development Department that it planned lay off 36 workers in Escondido, Calif., according to state records. In two separate notices to California officials in September, Cummins Meritor said it planned to lay off a combined 16 workers at two locations in Escondido, state records show.
Cummins acquired Meritor for $3.7 billion in 2022 through a combination of cash and debt in what Cummins officials said at the time would accelerate the company’s efforts in technologies that curb emissions from commercial vehicles and industrial applications.
It is unclear if the actions in South Carolina and California are related to the company-wide changes revealed in media reports this week.
The notifications, called WARN notices, were filed with state officials in compliance with the Worker Adjustment and Retraining Notification (WARN) Act, which requires employers with 100 or more employees to provide 60-day advance notice of planned closings or mass layoffs.
As of Wednesday morning, Cummins had not filed any WARN notices in Indiana related to the efforts to streamline the company’s operations, according to the most recent information available from the Indiana Department of Workforce Development.
In December, Cummins reached a settlement agreement with the U.S. Department of Justice and California, who had accused the company of installing software on hundreds of thousands of RAM engines made in Walesboro that caused the vehicles to bypass emissions rules.
The settlement included a $1.675 billion fine — which the Justice Department said was the highest civil penalty ever under the Clean Air Act — and an additional $325 million in estimated costs of recalling certain RAM engines and bankrolling emissions mitigation projects.
Cummins, for its part, has said it “has seen no evidence that anyone acted in bad faith” and did not admit wrongdoing in the settlement.
A company-wide note by Rumsey sent to employees on Tuesday emphasized that the changes are not related to the settlement, according to the Indianapolis Business Journal.
