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GE Capital Cutting Employees

by Christopher Menkin

This story was first reported last month that major cuts were coming at GE Capital, in many divisions. The last article being the new termination procedures.

This news appears before the national holiday, and timing appears to be important as the stock market will be closed on Monday. GE has confirmed that it has begun cutting jobs, many at GE Capital as part of a $2 billion cost-reduction program to stabilize the fledging financial unit, according to Market Watch.

Readers are reporting in they are receiving notices and would like to learn about other units, but it appears to be happening too fast, not only right before the national holiday but the presidential inauguration on Tuesday.

GE is not being specific, but according to Bloomberg it will be anywhere from 7,500 to 11,000 employees, with many from GE Capital.

Christopher Hinton in Market Watch reports:
"The financial crisis has hit non- bank lenders like GE Capital particularly hard. That's because these firms have to borrow a lot in commercial-paper and other debt markets to get the money they need to make loans.

"As the credit crunch deepened last year, it became much more expensive and, in some cases, almost impossible for these firms to borrow cheaply. In contrast, banks have customer deposits that can provide a more stable source of funding.

"The government has stepped in to support the commercial-paper market, making it easier for companies to borrow money from that important source. However, regulators seem to be favoring banks over other types of lenders."

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