GE confirms plan to eliminate jobs
Boston HQ to also suffer staff cuts
General Electric is planning layoffs even as it goes ahead with construction of its new Boston headquarters, and the money-hemorrhaging company readies for a reckoning with investors Monday — but Mayor Martin J. Walsh said he hasn’t been informed of the job cuts.
GE officials confirmed to the Herald that the planned Boston headquarters — originally slated for 800 jobs — would see layoffs, but they would not give out figures, saying the effect would be limited.
“As we have said, all aspects of the company are being evaluated for cost efficiencies, and that includes job reductions,” GE spokesman Jeff Caywood told the Herald. “We are committed to Boston and look forward to moving to Innovation Point in the first half of 2019. Renovation and rehabilitation of the two brick buildings are underway.”
As part of GE’s agreement to move to Boston from Fairfield, Conn., the company is supposed to get $25 million in tax breaks that are tied to how many employees it hires. Walsh praised GE for promising more property tax revenue and new jobs as it constructs its new global headquarters in Fort Point, and said he was unaware that the company now plans to cut back here.
“I continue to look forward to their headquarters playing a positive role in our community,” Walsh said in a statement. “While I know the company at large is evaluating cost efficiencies across the country, I have not been made aware by General Electric of any planned job layoffs here in Boston.”
New GE CEO John Flannery has called for cuts to the struggling company, saying it is slashing $1 billion in costs this year, with $2 billion more in cuts planned for next year. He told investors last month that “everything is on the table” as the company looks to reduce costs.
GE’s third-quarter earnings report last month was “completely unacceptable,” Flannery said, as profit fell to 29 cents a share — nearly half the 49 cents a share predicted by most analysts — and cash flow over the year declined to $1.74 billion from $2.9 billion.
Flannery said he will give a more complete picture of the company’s cuts and plans, including potentially reducing its dividend, at its investors’ meeting Monday.
After seeing GE’s quarterly earning reports last month, Walsh said he wasn’t worried about the company’s financial woes.
“I’m not concerned here in Boston,” Walsh said. “I think this is the first time out of many that we’re going to be living the ups and downs of a company, but just because their corporate headquarters is here doesn’t automatically mean cuts or other various happenings within the company will affect Boston specifically.”