GE to cut 12,000 jobs in power business revamp
GE to cut 12,000 jobs in power business revamp
The US company launched the cuts to save $1 billion in 2018, saying it expected dwindling demand for fossil fuel power plants to continue.
“Traditional power markets including gas and coal have softened,” GE said.
Rumors of sweeping job cuts were confirmed by labor union sources on Wednesday, with staff in Switzerland and Germany among those badly hit.
“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 Russell Stokes, head of GE Power.
“Power will remain a work in progress in 2018. We expect market challenges to continue, but this plan will position us for 2019 and beyond.”
New GE Chief Executive John Flannery last month outlined plans to shrink GE’s sprawling empire of businesses built up by predecessors Jeff Immelt and Jack Welch, whose strategy was based on spreading risk across a broad range of industries.
GE has previously said it would exit its lighting, transportation, industrial solutions and electrical grid businesses.
It also plans to ditch its 62.5-percent stake in oilfield services company Baker Hughes.
In Thursday’s layoffs, nearly a third of the company’s 4,500-strong Swiss workforce could be cut, while 16 percent of staff in Germany are also likely to be axed.
In Britain, about 1,100 positions will be affected, the company said.
GE employed 295,000 people worldwide at the end of 2016, according to the company website.
GE said it had begun talks with labor leaders about the steps.
Union leaders in Germany reacted angrily to the job cuts.
“The announcement by GE that it wants to cut thousands of jobs across Europe is neither strategically nor economically justifiable, and serves only to maximize short-term profit for shareholders,” said Klaus Stein, the representative of the IG Metall Union at GE’s plant in Mannheim.
“We are not going to accept this, and we will fight ... to preserve jobs.”
Demand for new thermal power plants dramatically dropped in all rich countries, GE said, while traditional utility customers have reduced their investments due to market deterioration and uncertainty about future climate policy measures.
Hardly any new power station projects had been commissioned in Germany in recent years, GE said. Heightened Asian competition had also increased price pressures.
GE rival Siemens is cutting about 6,900 jobs, or close to 2 percent of its global workforce, mainly at its power and gas division, which has been hit by the rapid growth of renewables.
Gold slips to 1-year low as US dollar firms
BENGALURU: Gold extended falls to a one-year low on Thursday as the US dollar firmed after Federal Reserve Chairman Jerome Powell asserted the need for further interest rate hikes amid a strong economy.
Spot gold was down 0.2 percent at $1,223.56 an ounce at 0703 GMT.
The yellow metal slipped to its lowest since July last year at $1,220.41 an ounce earlier in the session. US gold futures for August delivery were 0.4 percent lower at $1,223.20 an ounce.
“Gold market is just following the US dollar, the dollar is strong so it’s pushing the market down,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
“The economy is still good and interest rate still up, so that’s good for the US dollar and negative for gold for the time being.” The dollar held firm against its peers, supported by bullish comments from Powell, which affirmed expectations for at least two more interest rate hikes this year.
“Rallies continue to be well sold and it is difficult to see a break toward $1,236 — $1,240 (in gold) with the current dollar strength,” MKS PAMP Group said in a note.
Fed’s Powell in a closely watched two-day congressional testimony, said he believed the United States was on course for years more of steady growth, and carefully played down the risks to the US economy of an escalating trade conflict.
However, manufacturers in every one of the Federal Reserve’s 12 districts worried about the impact of tariffs, a Federal Reserve report said on Wednesday, even as the US economy continued to expand at a moderate to modest pace.
US President Donald Trump said on Wednesday the United States may hammer out a trade deal with Mexico, and then do a separate one with Canada later, sowing fresh doubts about the future of the North American Free Trade Agreement.
Spot gold has found a support zone of $1,220-$1,226 per ounce.
It may hover above this zone for one more day or bounce toward a resistance at $1,237, Reuters technical analyst Wang Tao said.
Among other precious metals, silver was down 0.8 percent at $15.41 an ounce, after earlier hitting its lowest since last July at $15.33 an ounce.
Platinum was 0.4 percent lower at $810.30 an ounce. In the previous session, it hit an over two-week low of $798.14.
Palladium was down 0.1 percent at $905.47 per ounce. It fell to its weakest since April 9 at $902.97 on Wednesday.