A major electric company is planning to cut Connecticut finance jobs.
General Electric Co. recently announced its plan to cut jobs and costs next year from GE Capital, based in Fairfield, Connecticut. The plan will save $2 billion in costs as the company slows lending in some businesses, considers others for potential sale and cuts jobs. The cuts, which will effect some of GE Capital’s 75,000 positions, will begin Jan. 1, 2009. Positions will be reduced as the company consolidates back offices and curbs lending in areas such as residential mortgages, according to an article by Bloomberg.
â€œBroadly, in a world where we think liquidity is an issue and is likely to remain an issue for a while, weâ€™re de-emphasizing in general product lines that attract a lot of debt for the amount of earnings,â€ Vice Chairman Michael Neal said in the article.
The company could decrease its finances to 40 percent of the parent company’s profit from about half last year as debt reduction becomes a focus. GE Capital funds its businesses by using the highest-available AAA-credit rating and is hoping it can continue with that model without becoming a bank holding company in the United states.
“General Electric lost about 60 percent of its market value this year after the global financial crisis prompted (CEO Jeffrey) Immelt to lower his 2008 profit target twice,” the article notes. “GE fell 5 cents to $16.06 at 4:02 p.m. (November 18) in New York Stock Exchange composite trading. GE Capital posted more than $7 billion in profit in the first nine months of this year, even with the turmoil in global markets.”