The US industrial giant – General Electric has slashed its dividend in half amid plans to significantly retool the conglomerate on the back of annual profit projections that were well below what investors had been expecting.

With its market capitalization down more than $100 billion (€86 billion) since January of this year, General Electric (GE) has been suffering after making losing bets on the energy sector, wrongly believing that the oil and gas business would grow indefinitely.

As a result, GE’s dividend is being cut to 12 cents per share, from 24 cents, starting next month, the company announced on Monday. GE chairman and chief executive (CEO) John Flannery told an investor conference in New York that the cost-cutting maneuver was part of the measures the company would undertake to make the company a “simpler and more-focused GE.”

“We have not performed well for our owners,” Flannery said, adding that this was unacceptable and that the management team was “completely devoted to doing what it takes to correct that.”

GE is cutting its dividend for only the second time since 1938 following a sharp deterioration in the cash position of the US industrial group. At the end of September, it had only $7 billion in cash flowand would have had to pay out $8 billion.

Flannery said he recognized the dividend cut would hurt those shareholders most who relied on dividends for current income, acknowledging “the gravity of this decision and the effect it has on many people.”

CEO Flannery also rolled out a restructuring plan that includes thousands of job cuts and sales of some units to focus on aviation, healthcare and energy. The company has not yet specified the exact numbers of the layoffs, or the countries or units that will be impacted, referring broadly to “workforce reductions” through cost cuts, cessation and consolidation.

Focusing on its core business

Flannery, who took over as CEO in August, said that GE would shed its majority stake in the oilfield services company Baker Hughes. Moreover, it would be selling off parts of its transportation and electricity businesses.

The CEO also announced GE was shrinking its board from 12 members to 18, and executive compensation would be tied to performance amid increased accountability following accusations of corporate waste at the 125-year-old company.

The renewed belt-tightening will follow a $1-billion cost-cutting program this year and an announcement of $2 billion in cuts in 2018. Staff levels have already fallen by 11 percent to 295,000 globally as of the end of last year.

Selling more of its business segments could bring GE a step closer toward its goal of shedding $20 billion in assets over the next two years.