General Electric Company (NYSE:GE) is cutting 12,000 jobs in an effort to reduce costs.
The GE layoffs will allow the company to reduce its structural costs by $1 billion in 2018. The company says that this is in addition to its other plans to reduce costs by $3.5 billion in 2017 and 2018.
“The plans announced today are driven by challenges in the power market worldwide,” the company said about the GE layoffs. “Traditional power markets including gas and coal have softened. Volumes are down significantly in products and services driven by overcapacity, lower utilization, fewer outages, an increase in steam plant retirements, and overall growth in renewables. ”
These GE layoffs will allow the company to reduce its headcount to a more manageable amount that better reflects the state of the power market. Russell Stokes, the President and CEO of GE POwer, says that the layoffs are painful, but that they will prepare GE Power for 2019 and beyond.
Stokes goes on to say that GE Power is a strong company and that the GE layoffs will allow its structure to become more simple. He says that this will further strengthen the company and will result in more value for its customers an investors.
Those that will face layoffs at GE are already starting to be informed about the decision. The company also notes that it will continue to notify workers and employee representatives about the GE layoff plans.
GE stock was up 1% as of noon Thursday, but is down 44% year-to-date.
As of this writing, William White did not hold a position in any of the aforementioned securities.