GE to shed 12,000 jobs worldwide as demand for traditional power plants drops – Business


General Electric Co said Thursday 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 number of Canadian jobs lost is not yet known, as GE declined a request from CBC News to say how many layoffs will be at its Canadian operations.

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 four per cent of its overall workforce of 295,000, saying only that they would be primarily outside the United States. The cuts represent about 18 per cent of GE’s Power business, GE said.

Decision to buy Alstom

The announcement cast a spotlight on GE’s decision to spend €9.7 billion ($17 billion Cdn 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 labour 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 U.K.

Sales of power plants decline

But GE said the cuts were essential, since sales of new power plants are falling. Industry estimates expect sales of about 110 to 120 new gas-powered turbines a year, but capacity at GE and other major suppliers is about four times that.

“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, head of 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.”

A senior GE executive said jobs in France would not be hit because of an agreement when GE purchased Alstom. 

GE has previously said it would exit its lighting, transportation, industrial solutions and electrical grid businesses. It also plans to ditch its 62.5-per cent stake in oilfield services company Baker Hughes.

In Thursday’s layoffs, nearly a third of the company’s 4,500-strong Swiss workforce could be cut, while 16 per cent of staff in Germany are also likely to be axed. GE said it had begun talks with labour leaders about the steps. 


Business News


Please enter your comment!
Please enter your name here