The president of GE Power has said that it was a “painful but necessary” decision to axe around 12,000 staff from its global workforce.
Russell Stokes said that the plan to shed the jobs, which was announced on Friday, was taken to “respond to the disruption in the power market, which is driving significantly lower volumes in products and services”.
He added that “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.”
GE Power said the headcount reductions, combined with actions already taken this year, will position the company to reach its target of $1bn in structural cost reductions in 2018.
“This announcement aligns with GE’s effort to reduce overall structural costs by $3.5bn in 2017 and 2018” it said in a statement, adding that the actions “will strengthen GE Power’s global competitiveness and drive increased value for customers and shareholders”.
The job cuts will most affect staff in Europe. In the UK, around 1100 employees face an uncertain future at GE Power’s facilities in Stafford and Rugby.
Mark Elborne, president of GE UK & Ireland, said: “Regrettably, the proposed changes would have an impact on jobs in the UK. These are not proposals we ever make lightly and we understand that this news will be difficult for many people. Unfortunately, we believe that these changes are necessary to ensure that we can remain competitive and secure the future of GE Power in the UK.”
He said that a consultation period was now underway “before any final decisions are made.”
Elborne added: “GE remains committed to the UK, which will continue to be a strategic market for GE. We have almost 18,000 employees working at 65 sites in UK. Following this proposed restructure, we would remain one of the top five industrial companies in the country.”
And Stokes stressed that “at its core, GE Power is a strong business – we generate more than 30 per cent of the world’s electricity and have equipped 90 per cent of transmission utilities worldwide”.