General Electric Co. announced on Thursday it would cut 12,000 jobs in an effort to save $1 billion in 2018 to prepare for a decreased demand for fossil fuel power plants.
“Traditional power markets including gas and coal have softened,” the company said in a statement.
“This decision was painful but necessary for GE Power to respond to the disruption in the power market, which is driving significantly lower volumes in products and services,” said Russell Stokes, president and CEO of GE Power.
“Power will remain a work in progress in 2018. We expect market challenges to continue, but this plan will position us for 2019 and beyond," he continued.
"At its core GE Power is a strong business," he added.
The layoffs are expected to largely affect the company's staff in Germany and Switzerland, with a third of its workforce being cut in Switzerland and 16 percent of its staff likely to be let go in Germany, Reuters reported.
The cuts come after rumors surfaced that staff in the two countries would be heavily affected.
The company also announced 1,100 positions would be impacted in the United Kingdom, according to the news agency.
“The announcement by GE that it wants to cut thousands of jobs across Europe is neither strategically nor economically justifiable, and serves only to maximize short-term profit for shareholders,” said Klaus Stein, a union representative at GE’s plant in Mannheim, Germany, according to Reuters.
“We are not going to accept this, and we will fight ... to preserve jobs," he said.
GE said it had communicated with labor unions about the layoffs.