It keeps getting worse for business with exposure to the aviation industry. General Electric (GE) has announced it plans to cut 13,000 jobs from its aero services division, which until now was its biggest money earner.
Up to 13,000 jobs are on the line in GE’s aviation unit, as a considerable cutback in flights as a result of the coronavirus pandemic have hit the division hard. The job cuts would be just another addition to the ones already announced by Boeing and plane engine maker Rolls Royce. Boeing and Rolls Royce plan to cut 16,000 and 8,000 jobs respectively.
A drop in passenger demand by as much as 95%, coupled with the ditching of airline stocks by major players such as Warren Buffett is putting many airlines and associated aviation service businesses in dire straits. Last week, Richard Branson put up his iconic Virgin Airlines for sale in what has been a remarkable month of hard-hitting headwinds to confront the sector.
GE is 8.9% lower for May 2020. The downsizing of its workforce is part of a $3billion cost-cutting/cash saving program and adds to the 10% reduction in its US staff roll that was made public in March.
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GE Technical Outlook
The GE’s share price is presently trading at 6.22, which a few cents above its 1993 lows of 6.04. A break of this support level opens the door for GE share price to target the Nov 1990 support at 3.92, with the February 1988 lows of 2.91 sitting just around the corner.
On the flip side, a bounce from the present levels allows the GE share price to target the 10.85 and 12.14 price level (23.6% Fibonacci retracement from swing high of July 2016 to the swing low of March 2020.
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