GE Transportation isn’t the only division of the global company having serious issues. GE Power just announced a reduction of 12,000 jobs, about 18 percent of its workforce.
The company blames the downsizing on the decreasing demand for coal and fossil fuels caused by increases in alternative energy. Also contributing to the problem was GE’s deal to acquire Alstom S.A.’s energy business. Another factor would be government subsidies to the wind and solar industries, artificially reducing their price and distorting the market for conventional energy.
The plans announced today are driven by challenges in the power market worldwide. Traditional power markets including gas and coal have softened. Volumes are down significantly in products and services driven by overcapacity, lower utilization, fewer outages, an increase in steam plant retirements, and overall growth in renewables.
Whatever the reason or combination of reasons, analysts believe GE may still see further reductions in the near future.