New York, Dec 7 (AFP) Embattled industrial giant GeneralElectric announced today it will cut more than 12,000 blue andwhite collar jobs in its GE Power unit, part of a turnaroundplan launched by the new company leadership.
The layoffs will primarily hit facilities outside theUnited States, as part of an effort to reduce overallstructural costs by USD 3.5 billion in 2017 and 2018, thecompany said.
"This decision was painful but necessary for GE Power torespond to the disruption in the power market, which isdriving significantly lower volumes in products and services,"GE Power chief executive Russell Stokes said in a statement.
Labor leaders in affected countries balked at theannouncement.
"GE's announcement that it wants to cut thousands of jobsin Europe serves no strategic purpose other than to maximizeprofits short-term for its shareholders," said Klaus Stein,director of IG Metall the metalworkers' union in Germany,where about 16 per cent of GE's workforce will be eliminated.
The move comes as newly-installed chief executive JohnFlannery attempts to get the US industrial giant back on trackas key divisions -- power and oil and gas -- struggle in theface of weak demand as they compete with the growth ofrenewables.
GE shares have fallen more than 40 per cent in 2017, andthe company has been downgraded by leading ratings agencies,including S&P and Moody's. Shares were up 1.4 per cent to USD17.91 in mid-morning trading.
The company faces anemic demand and global overcapacityof gas turbines and other power equipment which has pressuredresults at GE and rivals such as Siemens, which last monthannounced it would cut 6,900 jobs globally due to weak demand.
GE's job cuts affects about 18 per cent of the energyunit's global workforce. The company said it also plans toreduce its capital spending and research and development.
About 1,100 jobs would be lost in Britain, 1,400 inSwitzerland and 1,600 in Germany, where several citiesincluding Stuttgart and Berlin would be affected. None of thejob cuts announced today will affect France, according to aperson familiar with the matter.
GE was required under a 2015 deal to acquire the energyassets of France's Alstom to increase overall Frenchemployment by 1,000 by the end of 2018, according to twopeople familiar with the matter.
Flannery, a longstanding GE executive promoted over thesummer to the top post, last month unveiled a turnaround planthat included cutting about 6,000 jobs in its corporatedivision, as well as an unspecified number of layoffs inoperational divisions.
The plan also included divestitures of some businesses, adividend cut, a reduction in the size of the board ofdirectors and a new compensation system to better tieexecutive pay to performance.
Flannery expressed disappointment with the performance ofthe Alstom business, which GE bought in 2015 for USD 13.5billion. (AFP)NSA.
This is unedited, unformatted feed from the Press Trust of India wire.