GE’s restructure includes sharp cuts at GE Digital.

Jeff Imelt had a dream for GE. It would get on board the digital manufacturing train. They would ride it toward new modes of profitability. He built a division called GE Digital and spent a lot of money on it.

Then profits and stock price took a dive. One of those activist investors got a seat on the board. The kind of guy who doesn’t want to build a company. He wants to break it up in order to get a quick payday.

Immelt’s out. Flannery, former CFO, is in. When he spoke at Minds + Machines a few weeks ago, we knew there were cuts coming. But he said he was all in on digital. But he also said he wanted more use of partners and less of inventing everything inside.

Well the shoe dropped. $400 million in cuts at GE Digital. Lots of layoffs. We’ll just have to see what the future holds for GE in the software business.

The creation of GE Digital and its Predix product befuddled most of us on the outside. There were many aspects that looked like they were thrown together in order to satisfy upper management’s drive to show results of digital transformation.

(Aside: those of us who have worked in product develoment, like me, have never seen upper management pressure to get something released before its time—he said sarcastically.)

From The New York Times, “GE Digital, Mr. Flannery said, “continues to be vital to the company.” But its spending will be trimmed sharply as it concentrates on a narrower set of products that improve the efficiency and performance of G.E.’s industrial equipment.”

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