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General Electric has announced it embarked on an ambitious restructuring plan which includes a 50 per cent dividend cut, a reduction in the number of board seats and a narrower focus on aviation, energy and health care.
The initiative was presented by John Flannery, who became GE's chief executive on August 1, replacing Jeff Immelt after 16 years at the helm of the industrial conglomerate, Efe news reported on Monday.
"This is the opportunity of a lifetime to reinvent an iconic company," Flannery told investors and Wall Street analysts at a meeting in New York.
Founded 125 years ago, the Boston-based company employs roughly 300,000 people worldwide.
GE plans to sell off a unit that makes train engines and another unit, Current, that is in the lighting business, and will consider getting rid of its controlling stake in oil-and-gas company Baker Hughes, Flannery said.
The board of directors is to be reduced from 18 members to 12, the CEO said.
Another aspect of the overhaul is a 50 per cent cut in the dividend paid to stockholders, from 96 cents a share to 48 cents, which Flannery said would save GE more than $4 billion a year.
"We've been paying a dividend in excess of our free cash flow for a number of years now.
We just don't think it makes sense for our company going forward," the CEO said.
Though reorganisation and cost-costing will entail job losses, GE is yet to say how many positions stand to be eliminated.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)