General Electric to cut 12,000 jobs in power business revamp

ZURICH/LAS VEGAS, (Reuters) - General Electric Co said yesterday it is axing 12,000 jobs at its global power business, the struggling industrial conglomerate’s latest effort to shrink itself into a more focused company.

The U.S. company launched the cuts to save $1 billion in 2018 at its Power business, saying it expects dwindling demand for fossil fuel power plants to continue. GE’s cuts follow a decision by rival Siemens AG to slash 6,900 jobs in the face of a global shift by electric utilities away from fossil fuels to renewable sources of energy such as wind and solar.

GE did not give a breakdown of the job cuts, which represent about 4 percent of its overall workforce of 295,000, saying only that they would be primarily outside the United States. The cuts represent about 18 percent of GE’s Power business, GE said.

The announcement cast a spotlight on GE’s decision to spend 9.7 billion euros ($10.7 billion when the deal closed in 2015) on the energy business of France’s Alstom. The deal rounded out GE Power’s portfolio by adding steam and nuclear capabilities to its mainly natural gas turbine power business.

But the purchase came just as demand for new power plants was slowing, in part due to competition from wind and solar systems.

“Traditional power markets including gas and coal have softened,” GE said on Thursday, explaining the decision for the job cuts.

Rumors of sweeping job cuts were confirmed by labor union sources on Wednesday, with staff in Switzerland, Germany and Britain among those badly hit.

Unite, the largest trade union in Britain and Ireland, said the announcement put 1,100 jobs at risk and it vowed to fight against any compulsory layoffs in the UK.

GE risks “cutting too far, too fast,” to deal with the changing power market.