After 125 years, General Electric ditches its most renowned product: the lightbulb. GE reports the lighting division of their Company does not make enough revenue to continue into the future. New CEO John Flannery states GE will focus on other areas of the business like health, power, and aviation according to a report posted by CNN.

With the rise in popularity of LED lights that can last up to ten years, GE’s lightbulb sales have steadily declined, only generating 2% of the company’s income within recent years. Just weeks after becoming the new CEO of the company, Flannery is looking forward to the new and improved future of General Electric.

The change may seem shocking to people as GE’s relationship with the lightbulb dates back to the days of Thomas Edison. Edison’s company, Edison General Electric Company, combined forces with competitor The Thomson-Houston Company in 1892, thus forming General Electric.

Is there more behind the cut?

According to The Seattle Times, General Electric stock has been down 40% this year. As GE has been a well-established company for several years, new investors are harming the stock market for the company with their “get rich quick” intentions. Flannery hopes the new cuts will improve GE’s business overall.

Some are not so confident in the new CEO’s decision. They believe Flannery is undoing the legacy built by former CEO and chairman, Jack Welch.

Welch held his position for 30 years until 2001. His business philosophy according to Financial Times was to build “great people,” which translated to building great leaders who would be at the forefront of the different business areas within the company. This strategy is believed to be the reason why General Electric thrived and exponentially grew over the years.

GE follows a new direction

Instead of focusing on developing strong leaders, Flannery will focus on making more capital. By focusing more on thriving aspects of the business, Flannery will be able to cut approximately 20 billion dollars of spending. Also, due to the elimination of light bulbs in the company, Flannery will be able to save even more money by cutting thousands of employees.

But, don’t worry. Flannery is not planning on making these drastic changes to the company until 2018. Flannery says GE will be different, but it will still hold the same values of providing safe and innovative ways of serving the world.

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