General Electric, a large global firm, is discontinuing part of its efforts to use wind energy and laying off 20% of the sector’s staff. Numerous employees will be ejected from onshore wind projects, according to an unnamed source close to the business. General Electric’s wind unit employees received a message informing them of significant layoffs.
A representative for General Electric Renewable Energy spoke with CNBC about the adjustments and the group’s new market focus. According to the spokesman, the company wants to “streamline” the extraction of onshore wind energy in order to position the industry for success in the future. In order to maintain profitability, the firm insisted that closing 20 percent of the workforce’s locations onshore was a necessity rather than a choice made by the workers themselves.
Although the prolonged layoffs are only occurring in US wind farms, General Electric is also attempting to streamline its personnel in Europe and Asia. Recent personnel decisions made by the firm were sparked by a variety of issues, primarily caused by disruptions in the supply chain and competition from other significant energy companies. The corporation has also been plagued by rising input costs for General Electric’s facilities, which is what finally led to the labour reduction initiatives.
Despite the fact that demand for clean, renewable energy has increased since the start of the twenty-first century, wind power, unlike solar or electricity, has had difficulty growing in popularity. Wind power hasn’t been as cost-effective as electricity, which is frequently employed as a renewable energy alternative. For businesses dedicating facilities to onshore wind production, the recently enacted Inflation Reduction Act helps reduce costs, but experts think this effort was not proactive enough.
Although wind energy is not the most popular renewable energy source, it contributes significantly to General Electric’s earnings. Melius Research analysts looked at the company’s renewable divisions and discovered that GE generates $16 to $17 billion in clean energy revenue, with onshore wind accounting for 70% of that total. Due to the company’s reliance on wind energy, it is essential to make economically sound choices, such as letting go of 20% of the US wind staff.
The unexpectedly extensive layoff process follows the approaching corporate separation. The company intends to divide its businesses into three distinct divisions: aviation, healthcare, and energy. General Electric intends to launch the division early in 2019, with the healthcare industry becoming formally established by early 2023.
The energy company may benefit from General Electric’s impending split as its stock shares increased by 2% following the announcement. The CEO of GE addressed the gap, saying that the company’s industries will get the extra attention and concentration required for long-term growth. GE’s objectives will better serve its customers and total profitability, which has attracted the attention of investors who consider this strategy as advantageous.
Despite having the largest market value at the start of the twenty-first century, the company’s value was severely damaged by the 2008 financial crisis. The stock was subsequently removed from the Dow Jones Industrial Average after a decade of financial upheaval. GE is investing in new financial tactics to rebuild its global empire as it steadily climbs the market value ladder.
General Electric’s Latest Move: Abandoning Wind Power? was first published on Tell Me Best.