GE layoffs amount to 22,000; better profits expected in 2002

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NEW YORK — General Electric cut 22,000 jobs this year from its work force of 313,000 and is prepared for a business climate in 2002 just as weak as this year, the company said yesterday. Some of the cuts at the industrial and financial-services conglomerate were offset by new hires in some company divisions and by acquisitions GE made that increased staffing, said spokesman David Frail.

Frail said the company would not provide figures detailing the net impact of the job cuts and additions on GE's work force until it releases its annual report next spring.

GE this year periodically announced job cuts at various divisions, but yesterday marked the first time the company has said how many eliminations have taken place overall.

The reductions were part of a "dramatic restructuring" at GE to deal with the recession, chief executive Jeff Immelt said yesterday at a conference for analysts. He predicted that tough economic times will persist throughout 2002, and said GE executives aren't expecting a turnaround until 2003. "We still view that we're going to have to run the company in a very lean way next year," Immelt said.

Immelt, who took over GE's leadership when Jack Welch retired in September, spent nearly two hours telling analysts his view of the world economy and the company's prospects for 2002 and 2003.

Despite the gloomy outlook for next year, Immelt said, GE is well-positioned for an extended downturn and anticipates increasing profits by 17 to 18 percent in 2002. The increase in 2002 profits could reach 19 percent or higher if economic conditions improve in the second half of 2002, but Immelt downplayed that scenario.

"The base plan we're going to give for next year assumes nothing improves for the year," he said.

Investors should be pleased with GE's 2001 performance because the company is on track to provide year-end profits of 11 percent despite the poor economy and the terrorist attacks in New York and on the Pentagon, Immelt said. "With the global recession and the 9/11 tragedy, we still delivered," he said.

Immelt said he isn't concerned about having to make his mark after taking over from Welch, who led the company for two decades and is widely credited for turning it into one of the most admired corporations in the world.

Instead, Immelt said, he spends his time planning new businesses for GE and how to make the company grow rapidly.

"We're on to the next page," he said.