GE Shed About 78,000 Workers in 2019 -- Update

Date : 02/25/2020 @ 12:25AM
Source : Dow Jones News
Stock : General Electric Company (GE)
Quote : 7.3  0.27 (3.84%) @ 1:00AM
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GE Shed About 78,000 Workers in 2019 -- Update

General Electric (NYSE:GE)
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By Thomas Gryta 

General Electric Co. last year shed roughly 78,000 employees, or more than a quarter of its workforce, as divestitures left the company with the same number of employees as it had in 1951.

The company ended 2019 with about 205,000 global workers, down from about 283,000 a year ago, according to GE's annual report filed on Monday. In the U.S., its workforce dropped to 70,000.

It is the lowest number of employees at GE since the post World War II boom. The company ended 1951 with an average workforce of about 210,000 and had more than 400,000 by 1969, according to a review of the company's annual reports.

The 2019 reduction is almost entirely explained by GE's decision to part with two units: the oil and gas division and the transportation business. The oil business had more than 65,000 employees, while the transportation unit had more than 9,000.

GE sold its oil and gas business to Baker Hughes Co. in 2017 but kept a majority stake until last year. After reducing its stake in 2019, GE no longer controls the company or counts Baker Hughes's financial results or staff as its own. The transportation business was merged with Wabtec Corp. in early 2019, transferring those workers.

"Our work is by no means finished, but we are on the right path," GE Chairman and Chief Executive Larry Culp wrote in his second annual letter to shareholders. Mr. Culp, the first outsider to run GE, was appointed to the top job in October 2018 when problems in a legacy insurance unit and its power division prompted the company to slash its dividend and profit targets.

GE, which once operated facilities in all 50 states and dozens of countries around the world, also scaled back its global footprint by selling those divisions and restructuring its operations. In the past year, GE reduced its footprint by 175 manufacturing facilities world-wide. Its U.S. plants dropped to 94 sites from 162 reported a year ago.

GE's biggest unit, in terms of employees, is now its health-care business, which employed 56,000 people at the end of 2019. An additional 52,000 work at its aviation division. About 43,000 are in its renewable energy unit, after GE shifted some operations from the struggling power unit, which now employs 38,000 around the world.

There are about 2,000 people at GE Capital, a lending arm that has been shrinking. The remaining employees, roughly 13,000, are housed in GE's corporate operation, which also includes its retail lighting business, its digital operations, a global sales group and its research work.

GE's size is likely to shrink further as it awaits final approval for the $21 billion sale of its biopharma business to Danaher Corp. The deal, reached a year ago, is awaiting regulatory review. GE says it expects the deal to close in the current quarter.

In his letter, Mr. Culp reiterated his strategy of paying down the company's debt levels and improving its operations. GE last year reduced its total borrowings by more than $10 billion to $90.9 billion, including its GE Capital arm.

Last week, Mr. Culp cautioned investors the grounding of the Boeing Co. 737 MAX aircraft would pressure GE's ability to generate cash in the first half of the year, but he stood by his targets for the full year. He has forecast $2 billion to $4 billion in positive cash flow for the year from the industrial business.

Shares of GE have gained about 9% from where they were trading before Mr. Culp was named CEO. After tumbling in 2018, the shares rallied 54% in 2019. The stock ended Monday at $11.86.

Write to Thomas Gryta at thomas.gryta@wsj.com

 

(END) Dow Jones Newswires

February 24, 2020 19:10 ET (00:10 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.

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