GE CEO John Flannery announced a 50% cut to dividend payments to shareholders in what is expected to be the first step in a painful restructuring plan that likely will include significant layoffs

New York (AFP) - Embattled industrial giant General Electric on Monday announced a restructuring plan that includes thousands of job cuts and sales of some units to focus on aviation, healthcare and energy.

The company has not yet specified the exact numbers of the layoffs, or the countries or units that will be impacted, referring broadly to “workforce reductions” through cost cuts, cessation and consolidation.

But GE Power, which includes Alstom, will undergo a major overhaul to cope with the changes in the energy market.

The company also plans to reduce the number of staff working in research, digital and at headquarters currently about 24,000 employees, according to the plan unveiled to investors.

“We have not performed well for our owners,” CEO John Flannery told shareholders at a meeting in New York. “That is unacceptable and the management team is completely devoted to doing what it takes to correct that.”

Flannery, who took over as chief executive August 1, also said the turnaround plan would deliver a “simpler, more-focused GE.”

“Complexity has hurt us,” he said.

GE was due to pay out $8 billion in dividends but by September had cash flow of only $7 billion. Flannery said the payout no longer made sense.

With its market capitalization down by more than $100 billion since January, the maker of jet engines and power turbines also will slash quarterly dividends in half to 12 cents while selling off parts of its transportation and electricity businesses.

It also will shed its majority stake in the oilfield services company Baker Hughes.

“We understand this is an extremely painful action for our shareholders,” Flannery said, adding that the decision was made “after extreme deliberation and consideration of what the alternatives were”

Flannery said he recognized the dividend cut would hurt those shareholders most who relied on dividends for current income, acknowledging “the gravity of this decision and the effect it has on many people.”

The company also announced it was shrinking its board from 12 members to 18, and executive compensation will be tied to performance amid increased accountability following accusations of corporate waste at the 125-year-old company.