- General Electric (GE +0.7%) is higher after announcing plans to cut 12K jobs in its GE Power unit, one in five positions in the division and ~4% of the company's overall workforce of 295K employees at the end of 2016.
- GE says the cuts are part of its aim to cut $3.5B in structural costs in 2017 and 2018, including a $1B cost-cutting plan in 2018 by GE Power.
- “It’s a start,” says William Blair analyst Nicholas Heymann, adding that GE still needs to make operational changes in addition to job cuts. “It’s one thing to put the tourniquet on, and it’s another to redirect and create the path forward.”
- CRA Research doubts the efforts will be enough to turn around GE Power, "which has struggled with poor execution and demand shifts," and GE overall "faces a long drawn out restructuring... it's best to wait for signs of improvement before adding to positions."
- The move stokes further questions about the wisdom of GE's $10.6B purchase of Alstom's energy assets in 2015; most of the job cuts appear to be happening outside the U.S., suggesting that at least some will involve Alstom personnel.
- With the move, GE has taken the lead among U.S. companies in announcing job cuts this year, pushing past General Motors as it has eliminated a total of ~19.2K jobs in 2017.