United Technologies to Cut 11,600 Jobs Worldwide

United Technologies Corp. plans to cut 11,600 jobs as the global recession and credit crunch lead to lower sales and profit than previously projected by the maker of Otis elevators and Carrier air conditioners.

The company also will reduce its share buyback plan by 50 percent to $1 billion, Hartford, Connecticut-based United Technologies said in a statement today.

United Technologies said it is responding to “contracting markets worldwide.” As a result, sales will be about $55 billion this year, or $2.7 billion less than it forecast in December. Chief Executive Officer Louis Chenevert said an economic recovery that the company previously anticipated would start in the second half of this year now “appears unlikely.”

“The scale of this economic downturn has led to this un- surprising capitulation,” Rob Stallard, a New York-based analyst with Macquarie Capital USA, wrote today in a report to clients. He rates the shares “neutral” and doesn’t own any. “We believe it is a more realistic assessment of the challenges” United Technologies faces.

The company now forecasts per-share profit of $4 to $4.50, including 30 cents to 40 cents for the new restructuring plan, net of anticipated one-time gains of $200 million to $350 million. In January the company repeated a per-share profit range for this year of $4.65 to $5.15, compared with $4.90 in 2008.

United Technologies, which had sales of $58.7 billion last year, rose $2.31, or 6.2 percent, to $39.87 at 11:29 a.m. in New York Stock Exchange composite trading. The shares dropped 43 percent in the year through yesterday.

‘Fundamentally Reorganize’

“We’ll fundamentally reorganize United Technologies so when markets recover this cost structure will not come back,” Chenevert said today at a JPMorgan Chase & Co. aviation & transportation conference in New York.

The company will change its overhead structure “across the board,” he said.

“It’s a reset to reflect the new realities of the economy,” Howard Rubel, an analyst at Jefferies & Co. in New York, who recommends buying the shares, said in an e-mail. “The new game plan should work.”

Including actions for both 2008 and this year, the company’s total workforce will shrink by about 8 percent, or 18,000 workers, the company said. United Technologies had 223,100 employees worldwide as of Dec. 31.

The company in January said it planned to accelerate restructuring and that its December forecast was under pressure because of deteriorating conditions.

“We view UTX’s actions as prudent, given the sharp contraction in the capital goods marketplace,” said Joel Levington, a director at Hyperion Brookfield Asset Management Inc. in New York. “The company’s decision to curb its share- repurchase activities shows a strong commitment to maintaining a robust balance sheet and good liquidity.”