GE Capital plans 7,000 layoffs

General Electric Capital Corp. is expected to lay off 7,000 of its 90,000 workers worldwide, but the job cuts won’t have “a profound impact on IT,” a company spokesman said April 16.

The cuts are due to the company’s improved efficiency as it puts more of its functions on the Internet, said GE Capital spokesman John Oliver. Stamford, Conn.-based GE Capital is a wholly owned subsidiary of General Electric Co. It specializes in financing corporate loans and a variety of consumer financial products.

“This is all part of a productivity effort,” Oliver said. “There should be no profound impact on IT; there could be layoffs, but they will not be seismic, if you get my meaning.”

Oliver said that since GE Capital has been putting more of its functions on the Web, the company has improved its efficiency and changed the way it does business. He used the example of a standard business loan to a midsize company.

“We used to have 25 lawyers driving around in cars with big phone-book-sized documents,” Oliver said. “Every time someone touched the deal, they generated more phone-book-sized documents.”

Now that such loans can be had online, the number of people involved and the amount of paper generated by the deal has decreased, he said.

“In an average deal, we can save the client company about US$1 million in fees,” Oliver said. The online operation, he added, cuts the “time and complexity, and the number of people who need to touch the deal.”

Oliver said the layoffs will be spread throughout the company, which has offices in 45 countries.