January 16, 2009 / 6:20 PM / in 9 years

GE Capital cutting jobs but won't say how many

NEW YORK (Reuters) - General Electric Co said on Friday its GE Capital unit is cutting jobs as part of an effort to save about $2 billion this year, but declined comment on a report that as many as 11,000 positions would be eliminated.

“We are doing some layoffs within GE Capital,” spokesman Russell Wilkerson said, but he added neither GE corporate nor the capital unit would comment on the total number of people affected.

“We leave that to the business leader to communicate that,” Wilkerson said.

Earlier, CNBC television reported GE Capital would cut between 7,000 and 11,000 jobs, or as much as 15 percent of the unit’s total workforce.

Last month at an analysts’ meeting, GE Capital signaled that big cuts were coming, including “reorganizing the business to reduce costs and allocate capital more efficiently.”

Bill Cary, the unit’s chief operating officer, said GE Capital was prepared to take “tough actions” to manage costs, including eliminating lower-returning businesses within the finance arm.

GE said in November it would reorganize the GE Capital arm -- created in July when the company merged its commercial and consumer finance arms -- to focus on three regional centers in Europe, Asia and the Americas. The changes were to take effect at the start of 2009, and are aimed at cutting costs at GE Capital by $2 billion this year.

The unit, which provides financial products and services to businesses and consumers globally, employs 75,000 people. It accounted for nearly half of all profits in 2007, but its performance has dragged down the U.S. conglomerate’s results in recent quarters because of the global credit crunch.

GE shares, part of the Dow Jones industrial average, were down 24 cents at $13.53 in afternoon trading on the New York Stock Exchange. They had fallen as low as $13.07 earlier.

The shares lost about half their value last year as the credit crunch took a heavy toll on GE’s hefty finance business, and last month Standard & Poor’s lowered its ratings outlook on the company to “negative,” meaning that it had a one-in-three chance of losing its top-tier rating over the next two years.

GE is set to report fourth-quarter 2008 results next Friday.

Reporting by Nick Zieminski and James Kelleher, editing by Leslie Gevirtz

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