Engineering giant GE is making significant changes, including plans to more tightly target areas – likely including health care, aviation and power – it believes will prove most profitable, CEO John Flannery revealed at an investor meeting yesterday.

He also announced that its dividend would be cut in half – a 12-cent quarterly dividend, down from 24-cents, according to Reuters.

Earnings in 2018 would most likely also be down – to $1-to-$1.07 a share.

"We understand the importance of this decision to our shareowners and we have not made it lightly,” he said. “We are focused on driving total shareholder return and believe this is the right decision to align our dividend payout to cash flow generation."

Flannery has proposed unloading as much as $20 billion worth of assets, such as units in lighting and transportation, according to the Milwaukee Business Journal.

Part of the shift includes staff cuts, he told those on the conference call. Roughly a quarter of corporate employees, about 1,500 jobs, will be eliminated. Beyond that, he and other execs would give up long-term businesses, according to Forbes.

Selling assets, Flannery stressed, would be done with “a very dispassionate eye.”

While the move is in the right direction, one analyst at Melius, Scott Davis, told Reuters, “it is not enough. They need to cut more cost ... GE is still a bloated company with duplicate costs up and down the organization.”

Flannery faces big challenges in the power and transportation divisions, where operating profits could dip 25 percent – and GE Capital, where net income could drop 80 percent.

Reports suggest that GE will pivot to a bigger move on aviation, renewable energy gear and health care. Flannery ran the health care business before taking the helm of GE. He joined in 2014, and led its turnaround, building “organic revenues” five percent, and margins by 100 basis points in 2016.

In late October, however, news reports cited unnamed sources who said that there might be a sale in store for the health care IT business.

In early October, GE weighed in with third quarter results that CEO Flannery called “horrible,” according to Reuters, calling the organization's strong parts weighed down by the weaker ones that, “drain investment and management resources without the prospect for a substantial reward.”

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