GE cuts 12,000 jobs in its power business amid 'significantly lower' volumes
Shares of General Electric Co. rose 0.6% in premarket trade Thursday, after the industrial conglomerate said its power business was cutting 12,000 jobs globally, in both professional and production departments. GE Power said the jobs cuts come as part of its plan to reduce costs by $3.5 billion in 2017 and 2018. GE said its cost cutting plans are driven by "challenges in the power market worldwide," as traditional power markets, including gas and coal, have softened. "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," said GE Power Chief Executive Russell Stokes. "We expect market challenges to continue, but this plan will position us for 2019 and beyond." The volume declines are a result of overcapactiy, lower utilization, fewer outages, an increase in steam plant retirements and growth in renewables, GE said. The stock, which closed at a six-year of $17.66 on Wednesday, has plunged 44% year to date, while the Dow Jones Industrial Average has gained 22%.
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