US industrial giant General Electric is slashing almost a fifth of the global workforce in its power business, a move that will result in a swathe of job losses in the UK.
The power division - GE’s largest unit which makes turbines used in energy generation - said that it will shed 12,000 staff worldwide, including 1,100 employees in the UK.
Tough global markets were behind the cuts, GE said, along with questions about demand for gas and coal-fired power stations as renewable energy gains momentum.
“Demand for new-built power plants dramatically dropped in all OECD countries,” the company said in a statement.
“Traditional utility customers have reduced their investments due to market deterioration and uncertainty about future climate policy measures.”
GE described the worldwide market for power and grid business as being “essentially flat, with regions such as Western Europe experiencing a decline”.
Shedding almost one in five employees in the power division is part of the company’s target of cutting $3.5bn of costs by the end of 2018.
Mark Elborne, chief executive of GE in UK & Ireland, added: “These are not proposals we ever make lightly and we understand that this news will be difficult for many people.
“Unfortunately, we believe that these changes are necessary to ensure that we can remain competitive and secure the future of GE Power in the UK.”
Job losses in the UK - which will affect about 6pc of the company’s workforce in Britain - will be focused in GE’s operations in Rugby and Stafford.
GE's power business was responsible for $26.8bn of the total group revenues of $113.2bn last year and the division delivered a profit of $5bn.
The shake-up comes under recently installed chief executive John Flannery who took over in the summer from Jeff Immelt, who had led GE for 16 years.
“We’re in an era when some very basic assumptions about the global economy are being tested,” he said. “For an American company, our country is diverging from the rest of the world. We will be less of a leader in trade.”