General Electric (GE) - Get General Electric Company (GE) Report cut about 78,000 employees last year, more than a quarter of its workforce, leaving it with the lowest number of workers in its ranks since 1951.
In its annual report filed with the Securities and Exchange Commission, GE said it ended 2019 with about 205,000 global workers, down from about 283,000 a year ago. In the U.S., its workforce dropped to 70,000.
It is the lowest number of employees at GE since 1951, when the company’s post-World War II average workforce was about 210,000.
The 2019 reduction was almost entirely explained by GE’s decision to sell off its oil and gas division and its transportation business. The oil business had more than 65,000 employees, while the transportation unit had more than 9,000, according to the SEC filing.
Those divestitures and other cost-cutting efforts are part of GE’s three-year, $3.3 billion restructuring plan meant to streamline the company’s disparate business units and return it to profitability after several years of losses.
In a research note to clients, J.P. Morgan analysts noted that broader headcount remained unchanged in 2019, “… raising questions around how the cost structure is supposed to improve going forward.”
“While we have pointed out that lower restructuring means less cost out, we would have expected more given the company had talked about better attrition and a still somewhat meaningful $1.1 billion in cash restructuring following $1.5 billion in 2018,” J.P. Morgan said.
GE’s biggest unit employees-wise is now its health care business, which employed 56,000 people at the end of 2019, the company said. An additional 52,000 work at its aviation division, with another 43,000 in its renewable energy unit.
GE CEO Larry Culp last week cautioned investors over the ongoing grounding of Boeing's (BA) - Get Boeing Company Report 737 MAX aircraft, saying it will likely pressure GE’s ability to generate cash in the first half of the year.
Meantime, GE is turning to other sources of potential revenue, notably Boeing rival Airbus, which it is reportedly in talks with to design and sell an engine variant for its latest wide-body jet, the A330neo.
Shares of GE were up 0.13% at $11.87 in trading on Tuesday.