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02/01/2001 - Updated 11:32 PM ET GE layoffs may reach 80,000

By Noelle Knox, USA TODAY

NEW YORK — The layoff hatchet that has been striking with increasing regularity in the USA appears poised to take a huge cut out of one of the country's pre-eminent companies, Wall Street analysts say. General Electric, the world's most valuable company, is expected to layoff 75,000 to 80,000 people after it completes the $45 billion acquisition of Honeywell International in an effort to streamline operations of the two companies and move more of the business onto the Internet.

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While GE is already feeling the economic slowdown — the company cut 150 jobs at its NBC Internet division last month and announced another 500 job cuts at the network — most of the people who get pink slips will lose their jobs to new technology. About 30,000 of the overlapping positions at the two companies will be eliminated, according to a person with direct knowledge of the company's plans .

The layoffs, which would represent about 16% of the combined workforce, are a sensitive subject, particularly because GE still needs regulatory approval for its purchase of Honeywell, which strengthens GE's aircraft, chemicals and plastics divisions.

While GE CEO Jack Welch has acknowledged there will be "significant" layoffs, the company said Thursday that they have not decided on a number.

Beth Comstock, a GE spokeswoman, said, "We don't have the numbers; we are working on them."

She said the layoff figures, first reported on BusinessWeek.com, were "erroneous." However, USA TODAY confirmed the plans with a source who requested anonymity.

GE is just the latest industrial giant to announce job cuts, though its moves would clearly be the most drastic. The GE layoffs would be about three times the 26,000 jobs DaimlerChrysler announced this week, and would dwarf the 49,234 layoffs from technology and Internet companies since 1999, according a tally from the Industry Standard magazine.

GE is not expected to announce the job cuts en masse, but rather to layoff people strategically over the next two to three years.

"These guys stealth restructure," said Nicholas Heymann, an analyst at Prudential Securities.

But investors didn't seem surprised. GE's stock was up 19 cents at $46.19 in late afternoon trading.

The job cuts are expected to hit Honeywell the hardest. The company could lose as many as 50,000 positions, or 42% of its staff, according to a person familiar with the planning. Wall Street analysts said GE will save $1.6 billion this year on "digitization," technology improvements, that will reduce the company's head count by 11,000. Savings from the program will more than double next year.

In addition, GE has already announced that it would fire 30,000 employees from its Montgomery Ward department stores. Montgomery Ward, which is owned by GE's financial arm, filed for Chapter 11 bankruptcy protection in January.

Welch earned the nickname Neutron Jack early in his career at GE after cutting about 100,000 jobs in the 1980s.

http://www.usatoday.com/money/general/2001-02-01-ge-layoffs.htm#more

-- Martin Thompson (mthom1927@aol.com), February 02, 2001