ALO Alstom

By Blandine Henault and Ted Mann 

PARIS-- General Electric Co. said on Wednesday it plans to cut 6,500 jobs in Europe as it moves to integrate Alstom SA's power business and push through cost savings from the acquisition.

Roughly half of the cuts will fall in France, Germany and Switzerland, the company said, with other reductions scattered across the continent.

Job cuts had been expected since GE completed its $10.3 billion acquisition of Alstom's power business. The American company has promised investors it can cut roughly $3 billion in annual costs out of the combined operation by 2020.

GE has not yet announced how many jobs it could eliminate in the Americas, Africa and Asia, where it is also working to integrate Alstom's operations with its own power business.

"This is a necessary step to increase the competitiveness of the former Alstom businesses and generate the synergies we have targeted," a GE spokesman said. "We will work constructively with employee representatives throughout the process."

Some workers could find a way back in: GE currently has some 2,000 vacant positions in Europe, the spokesman said.

The total headcount at the Alstom business GE acquired stood at 65,000 worldwide in May 2014. The company employed around 35,000 people in Europe.

GE completed its purchase of the power equipment manufacturing unit of France's Alstom last year, a key plank of its strategy to shift back to an industrial base.

The company navigated considerable political currents in France to secure the deal, outmaneuvering German and Japanese rivals. But there was a price: GE agreed to create jobs in France, where Alstom is a major employer.

A GE spokesman in France said the company will cut 765 jobs in France, with the majority of those at Alstom's headquarters in the Paris suburb of Levallois and at the electric grid unit. He added around 50 people have left the company since August.

The French government reacted calmly and pointed to promises made by GE when it negotiated to take over Alstom's energy operations.

The government said it would hold the U.S. company accountable on pledge to create 1,000 jobs in France, net of any layoffs.

Economy minister Emmanuel Macron--whose predecessor Arnaud Montebourg spearheaded the government's strategy on the deal--said France would only be marginally impacted by GE's latest plans.

"There will be compensation for any posts eliminated in France," Mr. Macron said.

Write to Ted Mann at ted.mann@wsj.com

(END) Dow Jones Newswires

January 13, 2016 10:46 ET (15:46 GMT)

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