GE to cut 12,000 power jobs in changing market

• 6 years ago (2017-12-08)
• David Flin

Gas 393 North America 1021

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GE has announced that it will cut 12,000 jobs worldwide in its power division as alternative energy supplants demand for coal and other fossil fuels. The company said that the cuts to both office and production jobs will help “right-size” GE Power in a traditional power market that is being globally transformed.

The cuts represent 18 per cent of the workforce at GE Power. GE said that this reduction, along with actions previously taken this year, will help GE Power trim costs by $1 billion in 2018. GE is looking to reduce overall structural costs by $3.5 billion in 2017 and 2018. Russell Stokes, CEO of GE Power, said: “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.”

Global power trends are towards renewable sources, where production costs are falling rapidly. Fewer coal- and gas-fired power plants are being built, resulting in greater competition for fewer projects. These trends have also been affecting others. Last month, Siemens announced that it would cut 6900 jobs worldwide in jobs focused on power plant technology, generators, and large electrical motors.

John Flannery, GE’s new Chief Executive, announced plans last month for GE to focus on three core businesses – energy, health care, and aviation. Flannery said that the company plans to shed $20 billion in assets outside of these core areas.