Colleagues,
Over the past few weeks and months, we have all witnessed how rapidly the Oil & Gas Industry has changed. The drop in oil prices has had a significant impact on our customers, resulting in a dramatic challenge to our business. Our leadership team has held very candid discussions about this new reality. We are positioning the business by investing in areas that yield long term benefits for our customers, while at the same time, reducing our cost structure for volume reductions we are seeing for 2015 and perhaps longer.
As we enter one of the toughest markets in years, we need to stay close to our customers and deliver on our financial commitments. We have already taken proactive actions to reduce our cost structure, including contractor eliminations and internal travel restrictions. We have also intensified control of discretionary spending and have reduced spend across all bullet trains. While these actions have helped, collectively they are not sufficient.
As a result, today we will begin announcing actions to restructure and resize our business accordingly. Each product line, function and region will be impacted in different ways. Reductions will range from a small workforce reduction in certain locations to site closures in others. Given the magnitude, these are very tough decisions to make and it will touch us all. Still, it's a necessary one. We are moving quickly to implement these actions and believe they will enable us to run our business more efficiently, and remain competitive in a tough environment.
These are difficult times for everyone, especially for our colleagues who will be impacted by the restructuring. GE is committed to providing job transition services to help those affected find other jobs. I ask that you also give them the necessary support through this transition.
I know many of you will have questions about these actions. We will continue to communicate openly about our plans and the overall state of the business. Feel free to also reach out to your manager or HR leader for additional questions or concerns.
We have been through cycles before and have emerged from them stronger. Let’s stay focused on what matters most to our customers. 2015 will test our resolve and determination, but we face these new realities with a solid game plan, a broad solutions portfolio, and the talent and the courage to succeed.
I am confident we can overcome this challenging environment together and come out of this economic downturn stronger than ever.
Thanks for all you do,
Andrew