On Thursday, General Electric (NYSE: GE) announced plans to remove 12,000 jobs from their power division worldwide hoping to decrease costs and improve global competitiveness while facing many challenges in the power sector. These challenges include overcapacity, growth in renewable energy, as well as the reduction of traditional power sectors. The company expects challenges moving forward but hopes that this plan will improve their position by 2019 and years to come.
The job cuts are expected to help the company save $1 billion and lower costs by $3.5 billion towards the end of this year and beginning of 2018. GE also announced plans to cut their dividend last month. In addition, new Chief Executive, John Flannery, is looking to streamline a conglomerate with stakes in sectors such as jet engines and medical imaging equipment.
“This decision was painful but necessary for GE Power to respond to the disruption in the power market,” head of the company’s power division, Russell Stokes said in a statement. “We expect market challenges to continue, but this plan will position us for 2019 and beyond.”