In an effort to strengthen GE Power’s global competitiveness and drive increased value for customers and shareholders, the company has announced headcount reductions, combined with actions taken previously in 2017. The media statement stated that this move will position GE Power to reach its announced target of US$1 billion ($1.33 billion) in structural cost reductions in 2018. This announcement aligns with GE’s effort to reduce overall structural costs by US$3.5 billion in 2017 and 2018. The move is said to be driven by challenges in the power market worldwide.
According to GE Power, it plans to reduce its global headcount by approximately 12,000 positions, affecting both professional and production employees.
GE Power is right-sizing the business for these realities and is focused on improving operational excellence and reducing its footprint and structure, which will help drive significant improvements in cash flows and margins.
“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, president and CEO, 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.
“At its core GE Power is a strong business,” Stokes continued. “We generate more than 30 per cent of the world’s electricity and have equipped 90 percent of transmission utilities worldwide. Our backlog is US$99 billion and we have a substantial global installed base. This plan will make us simpler and stronger so we can drive more value for our customers and investors.”
Where required, the process of informing and/or consulting with employee representatives regarding these proposals has begun or will begin shortly.