A day after labor unions warned that General Electric was planning thousands of job cuts in its troubled power-generation unit, GE confirmed that it’s planning to cut 12,000 jobs globally in its power business as the company’s new leadership tries to revive the company’s moribund stock price.
The reductions would account for about 18% of GE Power’s workforce, will mostly affect professional and production workers outside the US. GE is also paring back capital expenditures and research-and-development spending as it grapples with a sharp downturn in gas- and coal-power markets.
Cuts - Flurry - Reductions - Chief - Executive
The cuts add to a flurry of reductions by recently installed Chief Executive Officer John Flannery, who has already scaled back use of corporate jets and delayed work on a new Boston headquarters since taking over from longtime CEO Jeff Immelt back in August. GE, the world’s largest maker of gas turbines, said last month it would pare the quarterly dividend and sell some businesses.
Trimming the workforce will help GE achieve its goal of slicing $1 billion of structural costs next year in the power division. That plan is part of a larger effort to cut $3.5 billion of expenses across the company through 2018.
GE - Shares - % - Premarket - Trade
GE shares were up 0.5% in premarket trade. However, the company’s shares have sunk 44% this year.
According to Bloomberg, GE had about 300,000 employees across its operating units at the end of last year. Power was the company’s biggest division, with sales last year of $26.8 billion. The total would have been $36.8 billion after accounting for the effects of a reorganization this year in which GE added some energy businesses to the unit.
Manufacturer - Demand - Electricity - Gas - Part
The manufacturer has been hit hard by flagging demand for electricity generated with natural gas, in part due to a shift toward power from renewable sources. In addition, “we have exacerbated the market situation with...
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