General Electric’s Power Division Slashes 12,000 Jobs
GE Power announced Thursday it is eliminating 12,000 jobs in its plan to reduce overall structural costs by $1B in 2018.
The move comes as alternative energy sources are on the rise and traditional power markets like gas and coal have softened. The company said it will help right-size GE Power to reflect the change in the energy market.
“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,” GE Power CEO and President Russell Stokes said in a prepared statement. “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.”
The announcement comes as Boston-based General Electric moves to reduce overall costs by $3.5B over the course of 2017 and 2018. The company’s new CEO, John Flannery, has made several sweeping changes since taking over for Jeff Immelt in August. While remaining committed to the company’s digital business, Flannery has said he plans to sell or spin off $20B of GE’s businesses in the next two years.
His cost-cutting has extended into how the company will build its new Boston headquarters. The $200M facility on Fort Point Channel was supposed to be completed by 2019, but it will now be erected in two phases. The first, a restoration of two older warehouses, will finish by the first half of 2019. The second, a new 12-story building, will open in mid-2021. The staggered approach will make construction costs lower, a GE spokesman told Bisnow.