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Bloomberg is reporting that General Electric Co.’s finance arm may cut 7,500 to 11,000 jobs, or at least 10% of its work force, because of the global financial slump, people familiar with the company’s plans said.
The reductions are part of GE Capital’s announced plan to reduce expenses by $2 billion this year, said the people, who didn’t want to be identified because the numbers aren’t public. The savings goal also includes expenses such as office closings.
Chief Executive Officer Jeffrey Immelt is making the finance arm a smaller part of the company and cutting jobs as he tries to trim about $5 billion in costs from GE, which is also the world’s largest maker of jet engines, power turbines and medical-imaging equipment. General Electric, which declines to release companywide staff-cut targets, gave notice to some GE Capital workers this week, the people said.
GE Capital had about 75,000 employees at the time the $2 billion in cost cuts were announced in November. Vice Chairman Michael Neal, who oversees the finance operations, declined at the time to provide a specific number. The parent company had 327,000 workers at the end of 2007.
The job-cut figures are based on an average salary of $175,000 at GE Capital, the people said.
“As we’ve said, GE Capital is transitioning to a smaller, more focused company that is well-positioned for the long term,” said Marissa Moretti, a spokeswoman for GE Capital. “We’ll be reducing costs by $2 billion in 2009 as we discussed in November. Job cuts are a part of that.” She declined to say how many.