The American conglomerate General Electric plans to cut 12,000 jobs from its energy business. The new general managers of the company aim to reduce costs and stabilize the tough manufacturer. The cuts, which account for about 18% of GE Power’s workforce, will most likely affect professional and manufacturing employees outside the United States. The GE also reduces its corporate and research and development spending while trying to overcome its sharp slowdown in the gas and coal markets.
The moves that can be announced today increase the savings made by GE’s Chief Executive, John Flannery, who has already reduced the use of corporate aircraft and delayed work on the new headquarters in Boston since taking office in August. General Electric, which is the largest gas turbine maker, said last month it would lower the dividend by 25% and sell some of its business.
The workforce contraction will help GE to achieve its goal of cutting the cost of its energy division by 1 billion USD next year. The plan is part of a wider effort to cut spending in the company by 3.5 billion USD by 2018.
The shares of GE fell by 0.6% to 17.66 USD, which is the lowest value of six years. The stock price has collapsed by 44% this year. This is the worst performing company in Dow Jones Industrial Average, which marks a 22% growth since the beginning of the year.