General Electric (GE, $66.22) is laying off workers at its onshore wind unit as part of a plan to restructure and resize the business, which is grappling with weak demand, inflation, labor shortages, rising costs, and supply-chain delays sources close to the company has stated.
GE’s renewable energy business faces a trifecta of challenges: rising input costs, supply chain issues, and competition from the likes of Siemens. While demand for clean energy options is rising as energy shortages continue to wreak havoc, analysts say it’s been challenging to make wind energy a cost-effective option.
The company will reduce its US onshore wind workforce by 20%, and cuts are planned in Europe and Asia. “These are difficult decisions, which do not reflect on our employees’ dedication and hard work but are needed to ensure the business can compete and improve profitability over time.” explained a GE spokesperson.
Why it matters
GE is not alone in its struggles. Heightened competition, supply disruptions due to the COVID-19 pandemic, and soaring metals prices exacerbated by the war in Ukraine have made it difficult for wind turbine makers to generate profits even as governments and companies are calling for more renewable energy in the face of climate change. Rival Siemens unveiled a plan to cut 2,900 jobs, mainly in Europe, after issuing a string of profit warnings this year. Profit at Danish wind turbine maker Vestas has also taken a hit.