NU Online News Service, April 16, 1:31 p.m. – General Electric Capital Corp., Stamford, Conn., is still not saying how many of the 7,000 jobs it plans to cut will come from GE’s life insurance and annuity operations.
But GE Capital spokesman John Oliver insists that many of the cuts will come through attrition and moving employees into new jobs, not just layoffs.
Wall Street analysts contend that GE Capital is making the cuts because its parent company, General Electric Company, Fairfield, Conn., wants to show investors it’s serious about getting earnings growth back on track.
But Oliver says the cutbacks are just the latest phase of pruning that started more than two years ago.
“This announcement doesn’t represent a new direction or change,” Oliver says. “It’s no different from what we’ve been doing. The difference is now we’ve put a number to it.”
Besides, Oliver says, “in context, it’s not that big a number.”
GE Capital employs a total of 90,000 people in 45 countries. GE estimates GE Capital has already cut about 19,000 jobs since late 2000.
Employees who have been let go will get resume help and other outplacement services, Oliver adds.
GE Capital is best known in the insurance industry for the work of GE Financial Assurance, Richmond, Va. But the company is also a major supplier of commercial and consumer loans, commercial equipment management services, and specialty finance and insurance services.
Although GE’s first-quarter results disappointed investors, GE Financial and GE Capital managed to increase earnings at a time when many other financial services companies have been struggling.
GE Financial reported $173 million in net income for the first quarter on $3 billion in revenue, compared with $159 million in net income for the first quarter of 2000 on $3.1 billion in revenue.
GE Capital reported $1.7 billion in net income for the first quarter on $5.4 billion in revenue, compared with $1.5 billion in net income on $5.7 billion in revenue.
Net income was up 9% at both GE Financial and GE Capital.