Last April, the financial markets cheered the biggest restructuring in GE's history when the oligopoly announced the dramatic shrinkage of GE Capital but more importantly, GE announced the largest, at the time, stock buyback in history, repurchasing some $50B in shares.
As we said at the time, "the main reason for this near record buyback announcement is two-fold: GE's belief that there is no incremental value left in GE Capital, the bulk of whose assets it is selling, a division which nearly bankrupted the conglomerate back in 2008 when as a result of its massive leverage, anywhere between 9x and 10x" and added that the other, less pleasant consequence for GE employees would be the massive layoffs to be announced in due course.
A few hours ago, "due course" arrived when the company announced plans to cut 6,500 jobs in Europe over the next two years, including 765 in France, a spokesman for the company in France said on Wednesday. The spokesman added that GE was sticking to its pledge to create 1,000 net jobs in France in the next three years as part of its recent acquisition of Alstom's energy business.
So definitely firing 6,500, but tentatively promising to add 1,000.
He spokesman added that unions had been informed on Tuesday and that talks would start on Wednesday. "This is a plan, which could change following discussion with employee representatives," he said.
We doubt the local unions will be delighted by the news, although we are confident they will not be surprised.
Furthermore, this is only the beginning, because as we showed late in December, as a result of last year's record $5 trillion global M&A spree, just the Top 10 M&A deal accounted for over 1.1 million workers: if one assumes a 10% "synergy rate" this means that over 100,000 workers will be quietly "cost-cutted" in the coming months.
It also means that the US "waiter and bartender" jobs recovery will not only soon be the strongest in history, but will promptly spill over to the rest of the world.