General Electric (GE) has announced that it is planning to cut up to 6,500 jobs in Europe and in those energy units it acquired from France's Alstom last year.
"The restructuring plan will touch several European countries and impact potentially 6,500 jobs out of 35,000," a GE spokesman told AFP on Wednesday, confirming an earlier report in the L'Est Republicain newspaper.
According to the newspaper’s report, the job cut may include up to 10,000 jobs worldwide.
The acquisition of Alstom’s power and grid businesses was completed by the US industrial giant in November for 9.7 billion euros (USD 10.5 billion). The acquisition took place after GE made a number of pledges to win the support of the French government and fend off competition from such rival companies as Germany’s Siemens.
One of those pledges was to create a net amount of 1,000 high-skilled jobs in France, and GE has announced that it intends to honour that pledge according to the company’s spokesman, despite the fact that it plans to axe 765 jobs in France as part of this restructuring scheme.
French government spokesman, Stephane Le Foll, said Paris would continue to monitor the company's implementation of its commitments.
In order to secure the deal for Alstom's gas turbine unit – which is a large, lucrative business with long-term contracts and income stream in a sector in which GE was already the world leader – the US company had to create three new joint venture companies to cover various areas, including renewable energy, electricity grids and nuclear power.
The French government, which has a veto right over sales related to strategic sectors of the country’s economy, was at first concerned about losing the industrial base for key nuclear power technologies and was sensitive about job losses as the country's economy struggles.
The GE spokesman, whose name was not mentioned in the report, said the company would begin talks with French labor unions about the job cuts, saying that slashing jobs would take place through voluntary departures and retraining would be offered to those in affected positions.
He added that GE had never hid its plans to cut some support positions.
Union representatives criticized the remarks, noting that since GE took over Alstom, the only thing it was doing was announcing job cuts.
"Where is the investment plan," said Laurent Santoire, of the CGT union.
The GE spokesman further stated that jobs would be also cut in non-European countries as part of the company’s restructuring plan, which was prompted by the disarray in the energy industry as a result of the plunging oil and gas prices on international markets. The spokesman, however, declined to confirm the 10,000 figure in the L'Est Republican.
"Over the long term we remain convinced that the marriage between GE and Alstom will make us stronger to confront this market," he added.
The acquisition has beefed up GE's energy division to 65,000 employees in more than 120 countries, and Alstom is now focusing on its rail business including its TGV high-speed trains.
Although GE hasn't provided any details about the job cuts in Europe, L'Est Republicain said 1,735 posts in Germany were slated to go in addition to 1,219 in Switzerland, 467 in Spain and 250 in Italy.