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GE to cut one fifth of jobs in power unit
December 08, 2017
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PARIS: Embattled industrial giant General Electric (GE) announced on Thursday it would cut approximately 12,000 blue collar and white collar jobs in its GE Power unit, more than a fifth of the total, in a bid to cut costs.

“The headcount reductions, combined with actions taken previously in 2017, will position GE Power to reach its announced target of $1 billion in structural cost reductions in 2018,” the company said in a statement.

Newly-installed CEO John Flannery last month announced a massive restructuring plan including thousands of job cuts and sales of some business units as he attempted to halt a slide in GE’s profitability and the company’s share price.

GE plans to reduce overall structural costs by $3.5 billion in 2017 and 2018 and sell around $20 billion in assets.

It said it was “right-sizing” the GE Power business, which has made the equipment that produces one-third of the world’s electricity, given difficulties in the power market worldwide as demand in gas and coal have softened amid the rise of renewables.

“This decision was painful but necessary for GE Power to respond to the disruption in the power market, which is driving significantly lower volumes in products and services,” GE Power chief executive Russell Stokes said in a statement.

“We expect market challenges to continue, but this plan will position us for 2019 and beyond,” he added.

Stokes said GE Power remained a strong business at its core, noting an order backlog of $99 billion.

GE Power is GE’s largest industrial business, having made approximately $27 billion in sales last year and employing 55,000 in more than 150 countries.

The company plans to cut as many as 4,500 jobs in Europe as the US industrial conglomerate shrinks its troubled power generation business, a labor union source said on Tuesday.

The cuts, which are linked to businesses ge bought from France’s Alstom in 2015, will affect employees in Switzerland, germany and Britain, said French newspaper Les Echos, which first reported the news on Tuesday.

The union source confirmed the layoff numbers to Reuters on Wednesday and said an official announcement was expected as early as Thursday.

ge did not confirm the numbers but said it was “reviewing its operations to ensure the business is best positioned to respond to our market realities and for long-term success.” The company had presented a proposal to the European body representing legacy Alstom employees, it added.

Agence France-Presse

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