General Electric announced that it's splitting its energy division into three standalone businesses later this year.
The move will greatly simplify communication with customers and investors and creates a more agile organizational structure that aligns more effectively with each industry sector.
The three new businesses will report directly to GE Chairman and CEO Jeff Immelt.
Currently, GE Energy Infrastructure employs 100,000 people with $50 billion revenue this year.
The new businesses are:
- GE Power and Water: this is the renewable energy arm, which also includes water processing technologies. Headquartered in Schenectady, NY, the unit will employ about 41,000 people, with $28 billion in revenue for 2012.
- GE Energy Management: delivery, management, conversion, and optimization of electrical power for customers across multiple energy intensive industries. Headquartered in Atlanta, Georgia, it will employ 27,000 people with $7 billion in revenue this year.
- GE Oil and Gas: equipment and services for the offshore and onshore oil and gas industry, it's headquarters are in Florence, Italy. It will have 33,000 employees with $15 billion in revenue this year.
GE will begin reporting separate financial results for these three businesses beginning with the fourth quarter of 2012.
"Big companies are always fighting organizational complexity. We are taking action at a time when the Energy business is doing well. The business had a solid quarter with earnings up 13% and has a big backlog of great products. Removing layers is one way to reduce costs and increase our speed, focus and agility in the marketplace so we serve customers better," says CEO Jeff Immelt.