According to a report, General Electric Co is laying off workers at the onshore wind unit, after informing employees in North America, Latin America, the Middle East and Africa, on Wednesday about the cuts. Reuters cited four sources familiar with the move to say that these layoffs are partly due to the company’s plans to “restructure and resize the business”.
Furthermore, they might also downsize their workforce in the upcoming days in Europe and the Asia Pacific. This comes as the industry is facing low demand, high costs and supply chain delays, said the report. The company has also confirmed that they are “streamlining” its onshore wind business citing market realities but refrained from commenting directly on the aforementioned layoffs.
According to sources, the cuts will affect at least 20% of the US onshore wind unit’s workforce, which is hundreds of employees at the company. The GE Renewables spokesperson also emailed the following statement to Reuters, “These are difficult decisions, which do not reflect on our employees’ dedication and hard work but are needed to ensure the business can compete and improve profitability over time.”
The report indicates that among GE’s renewable businesses onshore wind is the largest, as of the end of 2021, it employed 38,000 people worldwide. However, the onshore wind unit has reportedly been suffering due to inflation and higher costs of raw materials, as well as supply chain pressures.
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The US has been GE’s most onshore wind profitable market but it is faced with uncertainty since last year following the expiry of renewable electricity production tax credits. This has reportedly hit consumer demand and adversely affected the unit’s revenue this year.
The report has also attributed this to increased competition, supply chain disruptions due to the Covid-19 pandemic and soaring metal prices worsened by the Russian invasion of Ukraine. These aspects have made it difficult for companies like GE to make a profit despite more companies and the government pushing for renewable energy as a way to tackle climate change, reported Reuters.
This has reportedly pushed GE to prioritise its onshore business as it plans to turn its energy businesses, including renewables, into a separate company by the year 2024. The company sources also told the media that the onshore business is working on reducing fixed costs which they estimate could save at least some hundred million dollars in 2023.
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