GE to cut 6,500 jobs in Europe
The move is part of a global restructuring effort as the industrial giant seeks $3bn in cost savings from its purchase of Alstom SA’s energy business
General Electric Co. (GE) is planning to slash nearly 6500 jobs across Europe, just days after announcing a $1bn contract to design and build gas turbines for a new power plant at Waad Al Shamal in northern Saudi Arabia.
The move is part of a global restructuring effort as the industrial giant seeks $3bn in cost savings from its purchase of Alstom SA’s energy business.
The job cuts include 1,700 positions in Germany and 765 in France, a reflection of a wider drive scale down expenses following one of GE’s largest-ever acquisitions, which closed in November.
The company expects to generate $1.1bn in savings this year and almost three times that amount by the end of the decade.
“This is a necessary step to increase the competitiveness of the former Alstom businesses and generate the synergies we have targeted,” Deirdre Latour, a GE spokeswoman told Bloomberg by e-mail. “We will work constructively with employee representatives throughout the process.”
GE is seeking to maximise returns from the $10.3bn acquisition as Chief Executive Officer Jeffrey Immelt broadens the company’s reach in the energy markets. He is expanding divisions that make generators and oilfield equipment while selling off consumer-focused and finance operations.
The Alstom deal tightened GE’s grip on the lucrative business of servicing and maintaining gas turbines, while adding joint ventures in renewable energy and electrical transmission businesses.
GE fell 1.4 percent to $28.24 at the close in New York amid broad market declines. The shares rose 23 percent last year compared with a 0.7 percent drop in the Standard & Poor’s 500 Index.
The job cuts represent about 14 percent of the 48,000 people that the company’s power division employs in Europe after the Alstom acquisition, a spokesman said. GE, based in Fairfield, Connecticut, promised to create 1,000 jobs net new jobs in France to win government support for the deal.
It is not yet clear how much of the cost cutting will spill over to affect GE’s jobs in other regions such as the Middle East.