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US firm General Electric is planning to cut a total of 12,000 jobs in its power business as part of a Europe-wide cost-cutting exercise, blaming a fall in demand for new power stations and dwindling investment by its clients.
Of this, the firm intends to cut 1,100 jobs from its UK power business, mainly in Stafford and Rugby as it expects to save $1bn next year as demand for fossil fuel power plants wanes.
“Today’s actions are driven by challenges in the power market worldwide,” GE said, adding that conditions in western European market have been particularly poor. “To get back to competitiveness GE Power needs to remove cost substantially from its businesses.”
Mark Elborne, head of GE UK & Ireland, said: “…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.”
In October, GE slashed its profits guidance after posting a 5 per cent fall in third-quarter earnings to $1.8bn, due to weak trading in its power and oil and gas businesses.