GE is slashing 1,100 jobs from its UK power business under an organisational restructure, the firm announced.
The planned losses will hit the UK’s engineering heartland in the Midlands, affecting Stafford and Rugby, with the total potential losses representing around 6 per cent of the company’s UK workforce.
GE blamed deteriorating market conditions which have had a ‘significant impact’ on its economic performance, adding that demand for new built power plants had ‘dramatically’ dropped in all developing countries.
Traditional power markets including gas and coal have softened and that means less demand
The US industrial group expects the ‘painful but necessary’ job losses to help save $1billion next year as demand for fossil fuel power plants wanes.
In October, GE slashed its profits guidance after posting a 5 per cent fall in third-quarter earnings to $1.8billion, due to weak trading in its power and oil and gas businesses.
GE Power is the company’s largest industrial business, employing more than 55,000 people worldwide.
Mark Elborne, GE’s President and Chief Executive UK & Ireland, said: ‘Regrettably, the proposed changes would have an impact on jobs in the UK.
‘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.’
GE described the worldwide power and grid segments as ‘essentially flat’, with regions such as Western Europe experiencing a decline.
The statement said: ‘This increased pressure in the marketplace, coupled with intense competition and continuing pricing pressures, means GE Power has been working to eliminate costs, remain competitive and prepare for 2018 and beyond.’
GE is slashing 1,100 jobs from its UK power business under an organisational restructure
Elborne added that GE remained committed to the UK, having almost 18,000 employees at 65 sites, and would remain one of the top five industrial companies in the country.
Unite national officer Linda McCulloch said: ‘General Electric is in danger of cutting too far, too fast and leaving itself ill equipped to meet the challenges of the changing power generation market.
‘These proposals will be a shock for General Electric’s loyal workforce and deal a major blow to the Midlands’ economy which will be deprived of highly skilled well paid jobs because of this announcement.
‘Over the coming days and weeks, Unite will be supporting our members and scrutinising the company’s business case as we fight to save as many jobs as possible.
‘Unite will also be seeking guarantees from General Electric that there will be no compulsory redundancies and that there will be redeployment opportunities for workers wishing to stay with the business.’
GE added in a company statement: ‘Traditional utility customers have reduced their investments due to market deterioration and uncertainty about future climate policy measures.
‘Today’s actions are driven by challenges in the power market worldwide. Traditional power markets including gas and coal have softened.
‘Volumes are down significantly in products and services driven by overcapacity, lower utilisation, fewer outages, an increase in steam plant retirements, and overall growth in renewables.
‘To get back to competitiveness GE Power needs to remove cost substantially from its businesses.’