GE cuts 12,000 jobs in power business
The majority of the jobs are in the turbine business and the cuts, 18% of the total staff worldwide, come as part of plans to reduce GE’s overall costs by $3.5bn in 2017 and 2018.
The cuts will hit around 4500 people across Europe, including 1200 in Germany and 1100 in the UK. Plants at Mannheim and Kassel will close, while there will be staff cuts at Stuttgart, Berlin, Mönchengladbach, Stafford and Rugby. GE employs around 18000 people at 65 sites in the UK.
The cuts are driven by challenges in the power market worldwide as less power generation comes from coal and gas and more from renewable sources, says the company.
“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,” said Russell Stokes, president and CEO, GE Power. “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,” he said. “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.”
The process of informing and/or consulting with employee representatives regarding these proposals has begun or will begin shortly, says the company, but will not include staff in France as a result of the Alsthom deal. Unions in Germany and the UK are planning to fight the cuts.
“GE agreed to retain jobs in France when they took over Alstom power. That was a fixed part of the contract that will be adhered to. Nobody could have known that the market would change so dramatically,” said Michael Rechsteiner, who heads GE in Switzerland which will also see staff reductions.
“These are not proposals we ever make lightly and we understand that this news will be difficult for many people. Unfortunately, we believe that these changes are necessary to ensure that we can remain competitive and secure the future of GE Power in the UK,” said Mark Elborne, President and CEO of GE UK & Ireland. “We have shared our proposals with employees’ representatives and will now begin a consultation period before any final decisions are made.”
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