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(Reuters) - General Electric Co (GE.N) will continue to "aggressively" cut costs this year, Chief Executive Jeff Immelt said, reiterating the company's target for spending on restructuring in 2016.
The U.S. conglomerate in January doubled its estimate of restructuring spending for the year to $3.4 billion from the $1.7 billion it had targeted in December as it fights the effects of low oil prices and slow global growth.
"We are aggressively managing our cost structure to capitalize on deflation," Immelt wrote in a letter to shareholders. (www.ge.com/ar2015/letter/)
"In 2016, we will fund a record level of restructuring. We have a very strong balance sheet with excess cash," Immelt wrote, adding that this could allow GE to buy back stock, bolster dividends or acquire distressed industrial assets.
GE has done a "better job" of being its own activist, Immelt said, as it prunes non-core assets and transforms itself into what it calls a digital industrial company.
The company has been hiring more people to write complex software codes to efficiently run its jet engines, power turbines and medical equipment.
GE is also moving its headquarters from Fairfield, Connecticut, to Boston, which will give it access to the talent pool in a city that is quickly becoming a leading U.S. technology hub.
Activist investor Nelson Peltz's fund bought a $2.5 billion stake in GE in October, but said it would not seek a board seat as it backed the company's efforts to transform itself.
"...Complicated accountability, too much cost in the wrong places, excessive priorities and low market awareness. These are factors activists point to when they criticize companies. Shame on us if we need help from the outside to find this out," Immelt said, noting that GE was still "underowned" by big investors.
GE shares were slightly up at $29.46 on Monday afternoon.
Reporting by Ankit Ajmera in Bengaluru; Editing by Saumyadeb Chakrabarty