GE Has Nearly Halved Its US Workforce In 3 Years, And More Job Cuts Are Likely


General Electric Co. shares are certainly in recovery mode, having more than doubled from their 2020 lows, but some of those gains have come at the expense of the industrial conglomerate’s workforce. In a 10-K filing with the Securities and Exchange Commission. On Friday, GE GE, + 2.36% said it employed a total of about 174,000 people worldwide at the end of 2020, down 15.1% from the 250,000 employed at the end of 2019, as the COVID-pandemic 19 wreaked havoc on the company’s business.

Among GE’s business segments, Aviation’s workforce declined the most, by 23.1% to 40,000 employees, followed by Healthcare, which lost 16.1% of its workforce to 47,000 employees. On the other hand, Power reduced 10.5% of its jobs to 34,000 employees, while the Renewable Energy workforce was reduced by 7.0% to 40,000 people. But it‘s not just about COVID. GE said the 2020 job cuts were “primarily as a result of restructuring,” including actions to manage risk, reduce the financial impact of the pandemic and trade exits. The company has reduced its total workforce by 139,000 people, or 44.4%, in the last three years. In the US, the number of employees at the end of 2020 dropped by 14,000, or 20%, to 56,000 from 70,000 at the end of 2019. And for the past three years, the US workforce has been drastically reduced by 50,000 people, or 47.2%. GE posted charges of $ 856 million in 2020, and approximately $ 2.6 billion in the past three years, related to staff reductions, and indicated that more job cuts are ahead. “We continue to closely monitor the economic environment and look forward to further restructuring actions to more closely align our cost structure with earnings targets,” the company stated in its latest 10-K. World and US totals are now at the lowest levels since at least 1993, the last year for which 10-Ks were available on the SEC’s website. Jobs in the US as a percentage of GE’s total workforce fell to just 32.2% in 2020, down from 53.7% in 2000 and 73.4% in 1993. At the peak workforce of GE in 1999, there were 340,000 employees worldwide, with 57.9% or 197,000 employees. In the US, meanwhile, GE shares rose 2.4% on Friday to close at a month-long high of $ 11.73. It’s up 8.6% so far this year, after shooting a quarterly record of 73.4% in the fourth quarter. Since closing at a post-COVID low of $ 5.49 on May 15, which was the lowest close since December 1991, the stock has soared 113.7%. In comparison, the publicly traded fund SPDR Industrial Select Sector XLI, + 0.73% is up 51.9% since May 15 and the S&P 500 SPX index, + 0.47% is up 37.4% . The gains were supported by back-to-back earnings reports in which investors applauded GE’s progress in free cash flow, which surprisingly turned positive in the third quarter, then beat expectations by a wide margin in the fourth quarter.

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FactSet, MarketWatch

In conjunction with the launch of its 10-K on Friday, GE Chief Executive Larry Culp issued a letter to shareholders, praising the “significant progress” the company made and the momentum it has for 2021, facing to the challenges of the COVID-19 pandemic. “Together with our customers, the GE team kept the power flowing, the hospitals running and the planes flying,” Culp wrote in the letter. He also wrote on “Lean,” which he described as a set of principles that emphasizes “customer focus, elimination of waste, and ruthless prioritization of work to improve safety, quality, delivery, and cost.” Update on GE’s stake in Baker Hughes Also disclosed on Friday, GE sold about 28 million of Baker Hughes Co. BKR, + 0.75% of shares, or 7.4% of its stake, during the fourth quarter. But given the 56.9% increase in Baker Hughes’ stock price during the quarter, the value of GE’s stake had actually risen by more than $ 2 billion. GE said it owned 349,439,701 shares as of December 31, which at the time were valued at $ 7.28 billion. On September 30, GE had disclosed that it owned 377,427,884 shares, which were then valued at $ 5.02 billion. After selling another 38 million Baker Hughes shares in January, GE’s stake stood at 311,432,660, or 30.1% of outstanding shares, as of January 22. At Friday’s closing prices, that stake would be worth $ 7.06 billion.