Latest GE Power layoffs to impact 12,000 employees

GE Power layoffs : In a massive lay off program, General Electric (GE) will make 12,000 employees redundant at its GE Power unit with an aim to reduce the overall structural costs of the latter by $3.5 billion by 2018 end.

The reduction in its global workforce of over 55,000 employees has been driven by the challenges encountered by the company in the power market all over the world. GE Power further stated that gas, coal and other traditional power markets have weakened.

Facing the brunt in the GE Power layoffs will be both professional and production employees working in over 150 countries where the company has operations.

According to GE Power, the volumes have come down significantly in terms of products. On the other hand, it says that services have been hit with overcapacity, lessened utilization, fewer outages, a growing number of retirements of steam plants, along with the overall rise of the renewable energy sector.

GE’s Distributed Power plant in Jenbach, Austria. Photo courtesy of General Electric.

GE Power revealed that it is looking to boost operational excellence and trim down its presence and structure. The energy company through these measures expects to see significant improvement in its cash flows and margins.

The latest round of GE Power layoffs, along with previous actions taken in the current year, are to help the company reach its target of $1 billion as far as structural cost reductions are concerned for the year 2018.

GE Power reckons that the measures will improve its worldwide competitiveness and produce enhanced value for both customers and shareholders.

Commenting on the GE Power layoffs, Russell Stokes – the President and 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.

“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.”

“At its core GE Power is a strong business,” Stokes continued. “We generate more than 30 percent of the world’s electricity and have equipped 90 percent of transmission utilities worldwide. Our backlog is $99 billion and we have a substantial global installed base. This plan will make us simpler and stronger so we can drive more value for our customers and investors.”

Those affected by the GE Power layoffs are being informed by the company about the future proposals and consultations are likely to begin with individuals and employee representatives.