It has been a struggle for GE this past year. Due to mismanagement, GE’s stock has fallen 40 percent this year, and just this Monday the stock dropped 8 percent to its lowest level in 5 years. However, with its new Chief Executive Officer Flannery, GE is changing its ways so that it can return to growth. GE’s latest move towards recovery is cutting dividends. It plans to cut its dividend from 24 cents to 12 cents. Comes as a big shock considering GE is one of the highest dividend payers next to giants like ExxonMobil, Apple, and Microsoft. With this new dividend cut, GE is on track to save $ 4 billion a year. But it is not just its dividend that is getting smaller. GE is already on track to sell off 12 different units of its business. These will include many of its struggling departments like their gas and oil companies.
GE is looking at relinquishing its major stake in Baker Hughes, which holds GEs oil and Gas assets. It is also looking to sell off its light bulb business, which for a long time had been the symbol for the energy giant. Big changes are coming to the energy giant, who supplies over 30 percent of the world’s energy in 140 different countries. And it safe to assume that it will also move towards cutting many of its 300,000 workers it employs worldwide. It already has plans to decrease its board of directors from 18 member to 12. Flannery has stated that it took years for GE to get to the point that it is in now, and recovery will not be different. It will take a long time for GE to get back to growth and many hard decisions will have to be made in the process. For a long time GE was overspending and over extending its operations, wasting money on corporate jets and entering a multitude of different industries. Now it is paying the price, GE cannot keep up with how it was operating. GE’s situation is warning call to all other businesses, don’t overspend, and only take on the work you are not equipped to complete. Otherwise, like GE you may find yourself struggling financially.
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