(by BE Dunn)
General Electric has announced that it plans to cut 12,000 jobs in its power division.
Cuts come as the new GE CEO, John L. Flannery, institutes vast changes amid a decline in business for coal and natural gas products. The company cited “overcapacity,” lower usage, growth in renewable energy, and other factors as the stifle to coal and gas product sales.
GE’s cuts will eliminate nearly 20% of all employees in its power division. The announcement comes with no clear articulation as to when and where the cutbacks will occur though it is said to include both professional and production level employees.
“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 CEO Russell Stokes said in a statement. “Power will remain a work in progress in 2018. We expect market challenges to continue, but this plan will position us for 2019 and beyond.”
The cutbacks are said to contribute significantly to the company’s plans to scale back $3.5 billion in “structural costs” in 2017 and 2018.
That includes a $1 billion plan in 2018 by the GE Power division to cut costs.
The power division makes gas and steam turbines, electrical transmission products, nuclear plant infrastructure and other items.
Since his introduction as CEO, Flannery has trimmed fat and cut losses, slimming down one of the country’s most inflated, and apparently, overgrown companies.
GE, which once dabbled in or outright dominated everything from television broadcasting to lightbulbs, had tightened up under previous CEO Jeff Immelt.
But if Immelt, who sold off NBC and the appliance division, was Slimfast then it appears Flannery may be P90X.
“We have a challenge in our Power business, and that is something we have to resolve,” Flannery said, acknowledging “we did a poor job running that business.”