12,000 workers will be wiped out of GE as the company continues to fight for its survival
December 12th, 2017 3:38 pm | By admin | Posted In Business News
The worst is far from being over for General Electric as new job cuts have been announced this week in an effort to boost the company’s power business profitability – 12,000 job cuts.
This latest cut represents an 18% of the global workforce for the division, and it responds to a severe slow down in the demand of power plants and equipment. This move will save the company
around $1 billion per year, and it is in line with the strategy outlined by its new CEO John Flannery that involves cutting $3.5 billion across all GE’s businesses between 2017 and 2018.
The head of GE Power justified the move by saying 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”, adding that “This plan will make us simpler and stronger, so we can drive more value for our customers and investors”.
For a company as big as General Electric, turning things in a different direction is kind of like steering the Titanic away from the incoming iceberg. The iceberg may be far but the amount of
time required to move the gigantic ship can turn a far-away threat into an inevitable crash.
With shares declining by 44% this year, investors are expecting a serious U-turn-like move to stop the bleeding. Flannery’s efforts are yet to be proven effective, and opposition is already
rising up. Klaus Stein, a representative for IG Metall Union, a German-based labor union, already issued a statement categorizing the lay off as one that is “neither strategically nor
economically justifiable”. Adding that it “serves only to maximize short-term profit for shareholders”.
Klaus ended his missive with a threat-sounding statement, saying “We are not going to accept this, and we will fight”. A bunch of words that seem like the whistle blow sound of Flannery’s
marathon to turn GE back to what it was once.
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