General Electric plans to cut 12,000 jobs in its power division as the industrial conglomerate’s new CEO institutes sweeping changes and the company grapples with a decline in business for coal and natural gas products.
The company will cut nearly one in five positions in its GE Power unit. Overall, the layoffs equal about 4% of the company’s workforce of about 295,000 employees at the end of 2016.
GE said the cuts would contribute to its plans to slash $3.5 billion in “structural costs” in 2017 and 2018. That includes a $1 billion cost-cutting plan in 2018 by the GE Power division, which makes gas and steam turbines, electrical transmission products, nuclear plant infrastructure and other items.
Coal and gas product sales are down because of “overcapacity,” lower usage, growth in renewable energy and other factors.
The power industry had expected the growth in coal energy to stall for the next five years, however, the GE layoff suggests that growing renewables will mean there will not be a coal power growth recovery.
For companies like GE, there is some business for maintaining existing power plants but if new powerplant construction stops then most of the GE power jobs would go away.