General Electric confirmed plans to lay off 20% of its U.S. onshore wind workforce. The move will affect hundreds of jobs, CNBC reported.
“We are taking steps to streamline and size our onshore wind business for market realities to position us for future success. These are difficult decisions, which do not reflect on our employees’ dedication and hard work but are needed to ensure the business can compete and improve profitability over time,” a spokesperson for GE Renewable Energy told CNBC.
The company, based in Virginia, is also considering modifications for its onshore wind operations in Europe and Asia as well.
The changes were inspired by a series of hardships faced by GE’s renewable energy business, such as rising input costs, supply chain issues and competition.
“While demand for clean energy options is rising as energy shortages continue to wreak havoc, analysts say it’s been difficult to make wind energy a cost-effective option,” a recent press release states. “The recently passed Inflation Reduction Act does restore a tax credit for onshore wind, but some experts worry it came too late.”
A recent Melius Research report projects GE’s renewables segment to generate between $15 billion and $16 billion in revenue this year. Onshore wind is projected to contribute approximately 70% of the revenue.
“Shareholder interest in a money-losing or marginally profitable business would likely be very low, even in a 'hot' space like renewables,” Jake Levinson, director at Melius Research, said, affirming that pressure to get the renewables business in a better place before it makes the split.
The move also comes shortly after General Electric confirmed plans to divide itself into three publicly traded companies specializing in health care, aerospace and energy.