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General Electric announces 12,000 job cuts to save $1 billion next year

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General Electric (GE) announced that it is cutting 12,000 jobs at its global power business to help save $1 billion next year.

The decision to reduce the division’s global workforce by 18% was made due to dwindling demand for traditional power markets and is part of GE chief executive John Flannery’s restructuring plan to make GE a more focused company.

“Traditional power markets including gas and coal have softened,” the company said on Thursday, explaining why the job cuts will be made.

Russell Stokes, president and chief executive of GE Power, said: “This decision was painful but necessary for GE Power to respond to the disruption in the power market, which is driving significantly lower volumes in products and services.

“This plan will make us simpler and stronger, so we can drive more value for our customers and investors.”

The company did not go into details about the cuts, but did say that they would be primarily outside the United States.

According to Reuters, labor union sources confirmed rumours of the job cuts on Wednesday, with employees in Switzerland, Germany and Britain among those expected to be affected the most.

Britain’s largest trade union, Unite, said the announcement put 1,100 jobs at risk and will fight against any compulsory layoffs in the UK.

The BBC reports that German union leaders similarly denounced the cuts, stating that they too would fight to keep the jobs.

Mark Elborne, GE boss of the company’s UK and Ireland operations, was quoted by the BBC as saying:

“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.

“We have shared our proposals with employees’ representatives today and will now begin a consultation period before any final decisions are made.”