The heavy equipment maker, Caterpillar, announced layoffs on Monday and warned of a tough year ahead as a downturn that began in the United States metastasized into a full-blown global recession, gutting orders for its earth-moving equipment.

The world’s largest maker of construction and mining machines, which also reported lower-than expected fourth-quarter earnings, said on Monday it was laying off 17,000 workers, and buying out 2,500 others, to reduce costs in the face of what it predicted would be the weakest year for business since the end of WWII. The company said earlier that it was offering employees incentives to leave voluntarily, the company said.

The company cut its outlook for 2009 and seemed to raise the possibility that it would report a loss in the current quarter.

The news sent Caterpillar shares skidding 8 percent in premarket trading, pulling the broader market lower.