General Electric plans to cut 330 Texas jobs in oil unit
By Lewis Krauskopf
(Reuters) - General Electric Co (GE.N: Quote) plans to cut 330 jobs in Texas in its oil and gas division, as it grapples with pressure on the unit from the drop in oil prices.
The U.S. conglomerate notified Texas state regulators of the planned layoffs at its beam-pumping manufacturing facility in Lufkin, Texas, which amount to about 45 percent of the staff at the location.
GE agreed to buy oilfield pump maker Lufkin Industries for about $3 billion in 2013, one of several significant deals the company has struck to boost its presence in oil and gas.
Overall, GE's oil and gas unit employs about 45,000 workers.
"GE Oil & Gas has started restructuring projects to reduce the cost structure of the Lufkin business," GE spokeswoman Kristin Schwarz said in a statement. "This includes reducing employment, which is a decision we don’t take lightly but one we must undertake for the long-term health of the business."
GE's oil and gas investments have come under pressure with the steep drop in crude prices. The company has warned that its oil and gas unit could see revenue and profit fall 5.0 percent this year, as customers of its equipment and services slash capital expenditure budgets.
Analysts at Moody's Investors Service said in a report earlier on Monday that the hit to orders and sales may be worse than indicated by GE's management. However, the analysts said, "the impact on profitability and segment earnings will be more muted given anticipated cost savings resulting from aggressive ongoing restructuring initiatives."
(Reporting by Lewis Krauskopf)
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