As the oil prices continue to slip, the General Electric Company (NYSE:GE) announced further job cuts in its Lufkin Industries, Inc. (NASDAQ:LUFK) oil unit. GE said that it will slash a total of 575 jobs, from previous plans of 330 jobs. Earlier in January 2015, the company had notified the regulators about its plan of slashing 330 employees in Lufkin, Texas beam-pumping facility.
Challenging market conditions leading to workforce reductions
The company said that its job reductions increased from 500 (as announced in February 2015) to 575 now. The jobs cuts will create a vital impact on the employment of Angelina County workers in Texas. The spokeswoman of GE’s Oil & Gas Unit, Kristin Schwarz, said that the market conditions were becoming challenging. As a result of this, the additional workforce elimination was being announced in the Lufkin business. The oil and gas department of the company gives jobs to approximately 44,000 workers.
GE’s plans to create strong footsteps in oil and gas concrete sector
The company has been trying to reinforce its position in the concrete market of gas and oil through various deals in the recent past. Acquisition of Lufkin Industries in 2013, in a deal worth approximately $3.31 billion, was one of such deals. Lufkin is the maker of oilfield pumps. However, the company’s investment in this sector has backfired. With the deep cut in the crude prices, General Electric Company (NYSE:GE)’s investments have been pressurized, thereby leading to job cuts. Ensuring savings through employment reduction has been going on in a range of such companies, apart from slashed capital expenditure as well.
Earlier also, the company has issued warning that the oil and gas department of the business might see a falling profit and revenue. The General Electric Company announced a 5% decrease in the revenue of this sector for the present year. This happened after GE’s customers for services and equipment slashed the budgets of its capital expenditure.