The United States labor market is strong, but it’s an uncertain time to be an employee of General Electric, Siemens and others in the traditional power business.
General Electric is cutting 12,000 jobs, per CNN. Most cuts will come from outside the U.S., and the power division’s workforce of about 295,000 will be reduced by 18 percent in an attempt to save $1 billion.
Last month, Siemens said it was cutting 6,900 jobs mostly from its power division. Most of the job cuts will come from the U.S. and Germany and will come from the unit that provides turbines and services to companies that generate power from oil and gas, per CNN.
Siemens’ move came after a new down turn in the industry.
“The power generation industry is experiencing disruption of unprecedented scope and speed,” Siemens board member Lisa Davis said.
The rise of renewable energy has meant bad news for the power generation sector. According to CNN, GE said that disruption in the industry has led to a significant reduction of need for its product.
U.S. electrical generation sources from renewable energy rose 14.69 percent during the first three quarters of 2017, per the U.S. Energy Information Association, while generation from fossil fuels dropped 5.41 percent over the same time frame.
The GE job cuts will take place over the next 18 months. Pressure on companies like GE and Siemens will continue as demand for gas turbines has fallen.
According to Fox Business, The Paris-based International Energy Agency predicts that renewable energy's global share of power will rise from 24% to 40% by 2040. In India, coal's share of power generation is expected to drop from 76 to about 50 percent.