General Electric Company (NYSE:GE) slashed its profit forecast on the back of a poor earnings report that fell well below expectations, painting a turbulent time ahead for the company that employs over 100,000 employees in the U.S. A growing GE slump could mean a continued reduction of the company’s workforce in the U.S.
GE finds itself staring down one of the worst periods in the company’s history, with poor showings on the stock market for years, which has translated into an effort to cut costs. According to Statista, GE employed 125,000 people in the U.S. in 2015, but slashed that down to 104,000 in 2016. If the company continues to perform poorly on the stock market, more job cuts could be incoming.
The company is struggling with poor cash flows and slumping power generation markets. The GE slump represents by far the biggest loss on the Dow Jones Industrial Average, especially in a year when the index has set all-time highs.
The latest results are “completely unacceptable,” CEO John Flannery said on a conference call with investors. “We need to make some major changes with urgency and a depth of purpose.”
Flannery is said to be considering deep cost cuts across the board, which may rear its head in the form of job cuts, although no announcement have been made regarding employee movement as of yet.
“Everything is on the table,” Flannery said on the earnings call, his first as CEO. “Things will not stay the same at GE.”
The new CEO finds himself tasked with a herculean trial to right the energy giant after years of decline. The plan to reshape the Boston-based company will be detailed at a November 13 investor meeting, where the target is $20.00 billion in asset divestitures within two years, the company said.
The GE slump has already forced the company to make substantial cuts, with $500.00 million in cost reductions during the quarter, bringing the 2017 total to $1.2 billion, which the company said is head of its original objective.
The GE slump comes from the company struggling to contend with changing markets and demand for its energy goods, with the power generation division showing a sharp decline in revenue.
“Number of employees at General Electric in the U.S. from 2007 to 2016 (in 1,000s),” Statista, last accessed October 20, 2017.
“GE’s New CEO Slashes Profit Outlook, Sends Shares Tumbling,” Bloomberg, October 20, 2017.