Officials with the Atlanta-based power division of General Electric said Thursday that the company is cutting its global workforce by 12,000 jobs as part of corporate restructuring by the industrial giant and amid weak demand for coal and gas turbines.
GE Power officials said the cuts will affect “both professional and production employees,” according to a news release. GE officials announced plans to cut $3.5 billion this year and next year as part of a broader effort across the conglomerate to improve its financial performance.
It’s unclear how many job cuts might take place in metro Atlanta. The job cuts at GE Power are expected to be largely outside the U.S.
“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,” Russell Stokes, GE Power president and CEO, said in the release. “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.”
GE Power makes turbines for power plants fueled by gas and coal. GE Power and its rivals have suffered from oversupply of inventory as power grids worldwide have become more efficient and as more utilities shift to renewable sources of power.
That’s left companies like GE Power with a glut of manufacturing capacity at a time of slower sales of its products.
The job reductions are part of GE Power’s previously announced plans to cut $1 billion in spending in 2018. The layoffs announced Thursday amount to about one-fifth of GE Power’s total headcount worldwide.
GE Power isn’t alone in cutting jobs. German rival Siemans announced plans last month to cut 6,900 jobs, largely in jobs related to turbine production.
“At its core, GE Power is a strong business,” Stokes said in the release. “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.”
Last month, GE officials announced plans to cut the company’s dividend by half as it cut costs and put its focus on three core segments — aviation, energy and health care. GE has cut a number of business lines and sold assets since the recession.