CHICAGO (Reuters) - Caterpillar Inc CAT.N will move its global headquarters to the Chicago area from its longtime home in central Illinois this year, the company said on Tuesday, as it continues to grapple with weak demand for its earth-moving equipment.

The company logo is seen on top of a building, where Caterpillar (China) Investment Co., Ltd. is located, in Beijing, January 22, 2013. REUTERS/Jason Lee

The company’s decision to move its executive suite comes at a time of record-breaking crime in Chicago and a gloomy financial outlook both for the city and the state.

At the same time, Chicago has drawn in big companies such as Archer Daniels Midland Co ADM.N, one of the world's largest agricultural trading houses, formerly of Decatur, Illinois, and food maker ConAgra Brands Inc CAG.N, formerly of Omaha, that see an address in the largest city between the Atlantic and Pacific coasts as a plus for recruiting.

Caterpillar, currently based in Peoria, Illinois, cited recruiting and access to a global transportation hub as factors in the decision to move about 300 senior executives and staff to Chicago, starting this year.

“They’ll be moving basically what I call the seventh floor of downtown - the senior executives and some HR people,” said Lex Akers, dean of the Caterpillar College of Engineering and Technology at Bradley University in Peoria, which is named after the company.

The world’s largest construction and equipment maker did not specify the exact location of its new headquarters. It will not build a previously announced headquarters complex in Peoria, where the company was founded in 1925.

The decision marks a significant step away from the past by Caterpillar Chief Executive Officer Jim Umpleby, who took over on Jan. 1. He faces the challenge of reversing a multiyear sales decline triggered by the global commodities slump.

Eli Lustgarten, senior vice president for Longbow Research, said the move to the Chicago area represents “new management looking for greater efficiency in dealing with its global business.”

The company cut 12,300 jobs in 2016, including 7,700 in the United States. It is also considering closing two major production facilities, including one in Aurora, Illinois.

Shares were down 1.5 percent at $95.30 in afternoon trading.

Spokesmen for Chicago Mayor Rahm Emanuel declined to address whether local tax incentives helped facilitate Caterpillar’s move.

Republican Illinois Governor Bruce Rauner’s administration had no involvement in the move and only learned of it after the company’s announcement, an administration source said. Typically, state tax credits are not offered to companies wishing to relocate if they do not commit to adding new jobs.