General Electric Abandoning Wind Power With Latest Move?
General Electric is shutting down 20% of its wind power sector in the latest move.
This article is more than 2 years old
The multinational corporation General Electric is relinquishing some of its efforts to utilize wind power, shutting down 20% of the sector’s workforce. According to an anonymous source close to the company, hundreds of workers will be removed from onshore wind facilities. A note went out to employees working on General Electric’s wind unit regarding extensive layoffs.
A General Electric Renewable Energy spokesperson spoke to CNBC about the changes and the team’s new market direction. The spokesperson stated that the corporation is looking to “streamline” its onshore wind power extraction, wanting to position the sector for future success. The company wanted to ensure that the employees had nothing to do with the decision to lay off 20% of the workforce but that it was imperative to reduce the onshore sites for profitability.
Though the extended firings are restricted to US wind plants, General Electric is looking to consolidate its workforce in Europe and Asia, too. Many problems catalyzed the corporation’s recent employee decisions, mainly affected by supply chain interruptions and competition from other substantial energy companies. Inflated input costs for General Electric’s facilities have also burdened the company, which ultimately caused the workforce reduction measures.
Though clean and renewable energy has been more heavily demanded since the beginning of the 21st century, wind power has struggled to gain popularity, unlike solar power or electricity. While electricity is often used as a cost-efficient option for clean energy, wind power hasn’t been as economical. The recently imposed Inflation Reduction Act helps cut expenditures for companies devoting facilities to onshore wind production, but experts believe this effort was not proactive enough.
Though wind power is not the most sought-after renewable power, it’s a significant part of General Electric’s revenue. Analysts from Melius Research examined the corporation’s renewable segments and found that GE pulls in $16 to $17 billion in clean energy income, with 70% of that from onshore wind. The corporation’s reliance on wind power has made it crucial to make economically favorable decisions, like releasing 20% of the US wind workforce.
The surprisingly large layoff procedure comes on the heels of its impending company-wide split. The corporation wants to break up its enterprises into three separate units: aviation, healthcare, and energy. General Electric plans to initiate the division next year, with its healthcare sector formalizing by early 2023.
General Electric’s upcoming split could be a profitable move for the energy corporation, with its stock shares rising by 2% after the announcement. GE’s CEO commented on the divide, stating that the corporation’s sectors will receive the more necessary attention and focus for long-term growth. Investors have also seen this strategy as advantageous, noticing that GE’s plans will better serve its customers and overall profits.
Though the company held the most significant market value at the beginning of the 21st century, the economic recession in 2008 devastated its worth. After a decade of financial turmoil, the stock was ultimately omitted from the Dow Jones Industrial Average. As GE moves steadily up the market-value ladder, the corporation is dedicating new financial strategies to rebuilding its multinational empire.
