Embattled industrial giant General Electric announced today it would cut approximately 12,000 blue collar and white collar jobs in its GE Power unit, more than a fifth of the total, in a bid to cut costs.

“The headcount reductions, combined with actions taken previously in 2017, will position GE Power to reach its announced target of USD 1 billion in structural cost reductions in 2018,” the company said in a statement.

Newly-installed CEO John Flannery last month announced a massive restructuring plan including thousands of job cuts and sales of some business units as he attempted to halt a slide in GE’s profitability and the company’s share price.

GE plans to reduce overall structural costs by USD 3.5 billion in 2017 and 2018 and sell around USD 20 billion in assets.

It said it was “right-sizing” the GE Power business, which has made the equipment that produces one-third of the world’s electricity, given difficulties in the power market worldwide as demand in gas and coal have softened amid the rise of renewables.

“This decision was painful but necessary for GE Power to respond to the disruption in the power market, which is driving significantly lower volumes in products and services,” GE Power chief executive Russell Stokes said in a statement.

“We expect market challenges to continue, but this plan will position us for 2019 and beyond,” he added.

Stokes said GE Power remained a strong business at its core, noting an order backlog of USD 99 billion.

GE Power is GE’s largest industrial business, having made approximately USD 27 billion in sales last year and employing 55,000 in more than 150 countries.

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