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 engineering giant General Electric announced Monday it would slash dividend payments by 50 percent, the first cut since the global financial crisis as the new leadership works to restore the company’s financial health.

With the company short of cash, quarterly dividends will be cut to 12 cents a share from 24 cents, GE said. The company was due to present a full turnaround plan to investors later in the morning.

“We understand the importance of this decision to our shareowners and we have not made it lightly,” said CEO John Flannery, who took up his position over the summer.

“We are focused on driving total shareholder return and believe this is the right decision to align our dividend payout to cash flow generation,” he said in a statement.

GE was due to pay out $8 billion in dividends but by September had cash flow of only $7 billion.

The company’s market capitalization has fallen by more than $100 billion since the start of the year and Flannery is expected to unveil a painful recovery plan that includes significant layoffs and sales of some sectors to right the ship.

GE’s power generation business is expected to be particularly hard hit, and the company also may announce more than $2 billion in cost cutting, as well as sale of its transportation and medical IT segments, knowledgeable sources told AFP.