General Electric announced plans on Thursday to ax around a third of its Swiss workforce as the industrial conglomerate responds to a sharp fall in demand for fossil fuel power equipment.
GE aims to cut up to 1,400 jobs in Switzerland where it employs 4,200 people, but said no locations would close. According to French newspaper Les Echos, General Electric will cut 4 500 jobs in Switzerland, Germany and the UK. The cuts are associated with businesses, which General Electric acquired from France’s Alstom two years ago.
A labor union source confirmed the layoff numbers to Reuters on Wednesday and said an official announcement was expected as early as Thursday.
GE did not confirm the numbers but said it was “reviewing its operations to ensure the business is best positioned to respond to our market realities and for long-term success.” The company had presented a proposal to the European body representing legacy Alstom employees, it added.
The review will allow it to make sure that the power equipment business is strategically positioned to react to changing market situations in a manner that will facilitate future success.
The job cuts are believed to be part of GE’s plan to integrate its power businesses with its energy connections. Nicholas Heymann, an analyst at William Blair stated that the move could be fueled by the company’s cost-cutting plans that will allow it to save $1 billion in 2018 and an extra $500 million in 2019.
“Renewables will not have any reductions because the world is rapidly shifting from fossil to renewables as the cost of temporarily storing power becomes more affordable at $100/Kw for power packs,” stated Heymann.
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