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Industrial giant, General Electric (GE) have announced that 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 company says the job cut will mostly be outside the United States. The power division’s headcount will be reduced about 18%. About 295,000 people worked for GE overall at the end of last year, but the company has cut jobs and costs throughout this year. It hopes to reduce costs by $1 billion next year.

“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.”

Chief Executive Officer General Electric, John Flannery recently 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.

GE Power Chief Executive, Russell Stokes said in a statement.

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

GE, an icon of the American economy for more than a century, faces a cash crunch that could take years to recover from. It has been left in turmoil by years of questionable deal-making, needless complexity and murky accounting. Competition for renewable energy is putting pressure on the traditional power business. GE Power unit is GE’s largest industrial business, having made approximately $27 billion in sales last year and employing 55,000 in more than 150 countries.

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