Will GE (GE) Follow Siemens (SI) Job Cuts?

Siemens (SI) today said it will cut nearly 17,000 jobs. It gave the economic downturn as the major reason for the move.

Since Siemens and GE (GE) are in a number of related businesses included infrastructure, transportation, power generation, and medical solutions, it would make sense that the US company faces some of the same financial challenges.

Wall St. believes GE (GE) is very challenged. Investors have traded the stock down to under $27 against a 52-week high of $42.15. GE announces earnings later this week.

While GE has had trouble moving revenue up in most of its divisions in the first quarter, the company has not made any massive job cuts. If sales are not picking up, it may have to.

Aside from common businesses, GE and Siemens share something else. Siemens stock is off over 25% over the last year and GE is down almost 30%.

Siemens has clearly looked at its "order book" over the next year and does not like what it sees. The odds that GE has had similar visions are likely.

GE may have to sacrifice 15,000 or 20,000 people to get some respect back in the financial community. It is not likely to have a break-out quarter in revenue, and that leaves very few options.

Douglas A. McIntyre