American conglomerate, General Electric recently announced its decision to lay off 12,000 workers in its power business sector. The company believes the move will help it fight the anticipated fiscal losses for the upcoming year.
The reduction is part of a restructuring program being undertaken by the newly appointed CEO of General Electric, John Flannery. Attempting to defend the job cuts, the company released a statement saying, “Traditional power markets including gas and coal have softened”.
As such, it believes that the job losses are “painful but necessary”. The company hopes that the measure will save at least $1 billion in the upcoming year.
The company’s fear for loss comes from a marked reduction in fossil fuel power plants. With more and more companies opting to go green, the future has turned bleak for all competitors in the power supply industry.
General Electric has also announced its plans to cut 1,100 jobs from its UK power business. It stated that its offices in Stafford and Rugby will bear the worst of the cuts.
Additionally, almost one-third of the company’s Swiss workforce and one-sixth of its German one are also likely to face cuts.
The move is unsurprising to analysts who have been monitoring the company’s profits. In October this year, the company posted a 5% fall in its third-quarter earnings.
It declared $1.8 billion in the third-quarter, and blamed its loss on the weak trading of its power, and oil and gas, businesses.
The loss, however, is certain to come as a shock to workers of the company. In the past, General Electric’s Power branch has been one of the largest money makers.
As of now, the company’s power branch provides employment to over 55,000 people globally.