General Electric (GE) has announced plans to cut around a third of its workforce based in northern Switzerland as the American multinational responds to a sharp fall in demand for fossil fuel power equipment.
GE aims to cut up to 1,400 jobs over the next two years at its GE Power unit in the northern Swiss canton of Aargau, where it employs 4,200 people unit focusing on gas and steam turbine production, but said no locations would close. The unit was taken over at the end of 2015 from Alstom.
The American industrial giant explained its decision by the increased importance of renewable energies and energy efficiency, pressure on electricity prices and intense competition.
A GE spokesman told the Swiss News Agency that the restructuring concerns its sites at Baden, Birr and Oberentfelden.
The plans are part of 12,000 job cuts at its global power business in a bid to save $1 billion in 2018. Of these, GE has announced 4,500 job cuts across Europe; some 1,600 jobs are being axed in Germany. The firm employed 295,000 people worldwide at the end of 2016.
Recently, a Swiss delegation headed by Economics Minister Johann Schneider-Ammann and the president of the Swiss Employers' Association, Valentin Vogt, traveled to GE Power's Atlanta headquarters to meet with GE Managing Director Russell Stokes.
In early November, further discussions took place in Paris between Stokes and a Swiss delegation aimed at minimizing the impact for the Aargau site and to discuss new activities in other GE business units.
On Thursday, union leaders and local government officials reacted angrily to the news.
These cuts are a "terrible blow for the industry and economy of canton Aargau", declared Economics Minister Urs Hofmann. He told the Swiss News Agency that the cantonal government was working to try to limit the impact of the restructuring to the Aargau sites and to help those who lose their job.
The Swiss Employees' Association said the news was a terrible slap in the face for staff just before Christmas. It said GE should assume its social responsibilities and aim to preserve as many jobs as possible or find new positions for staff.
Thursday's restructuring news mirrors a similar GE announcement in January 2016, when 1,300 jobs were due to be cut. In June last year, GE reduced the number of layoffs to 900 out of the 5,500 posts at its Aargau sites in Baden, Birr, Dättwil, Turgi and Oberentfelden.