Latest news with #corporaterestructuring
Forbes
4 days ago
- Business
- Forbes
GE's 400% Breakup Return Is A Wake-Up Call For Every CEO
NEW YORK, NEW YORK - SEPTEMBER 06: CEO of GE and CEO of GE Aerospace, Larry Culp, speaks onstage ... More during GE The Lean Mindset: The Pursuit Of Progress Event at Chelsea Industrial on September 06, 2023 in New York City. (Photo by Ilya S. Savenok/Getty Images for GE) There was a time when GE symbolized everything wrong with corporate bloat. I wrote about it in 2019, covering the damage done by Welch's financial engineering, Immelt's empire-building, and the pension time bomb that dragged the company into long-term decline. It became a cautionary tale for investors who confused brand power with balance sheet strength. The GE breakup is now a success story that everyone, particularly CEOs, should be aware of. What followed would have been unthinkable at the time. GE has now delivered a 400 percent return to shareholders through one of the most effective corporate breakups in recent history. This was not a lucky outcome. It was a structural reset. Larry Culp did not save GE by patching it up. He saved it by dismantling what no longer worked and letting the market revalue the parts. The result is not just a comeback story. It is a signal to every CEO sitting on underperforming assets that the path to value is already in plain sight. The GE Breakup Blueprint Culp did what many before him were unwilling to do. He separated GE into three focused businesses: aviation, healthcare, and energy. It was a structural necessity. Each business had a distinct capital profile, a different growth outlook, and a unique investor base. For years they had been buried inside a complex, legacy-driven machine that masked their true value. The aerospace unit became GE Aerospace, a pure-play with visibility, margins, and scale. GE Healthcare stepped into a sector where clarity and comparables drive multiples. GE Vernova, the energy unit, aligned with the market's demand for clean transition and infrastructure exposure. These were not spinoffs in name alone. Each company now controls its own cost base, strategy, and capital allocation decisions. That separation of function is exactly what the market needed. It created three investable stories, not one misunderstood puzzle. This is why The Edge focuses on these types of situations, not just valuation screens. A business is only as valuable as its structure allows it to be. When that structure is misaligned, price alone tells you nothing. GE's transformation is proof that when incentives and operations are realigned, the value follows quickly. GE Vs S&P Post Spinoff The Market's Reaction To The GE Breakup Once the separation plan was set in motion, the market responded with precision. Investors didn't need another narrative. They needed clarity. With each division operating independently, the ability to assign real multiples returned. GE Aerospace quickly established itself as a dominant player in a post-COVID aviation cycle. GE Vernova captured attention as a levered play on energy transition and grid modernization. GE Healthcare stepped into its own, attracting sector-focused capital that once ignored the parent entirely. What resulted was a strong re-rating. The market priced the businesses as they were, not as they had been hidden inside a tangled conglomerate. I called this early in my 2024 Forbes piece on GE's revival, when the breakup began to gain traction with institutions. Barron's followed with a lead feature quoting my assessment of Culp's plan. The message was the same: the market doesn't reward some fantastic ideas (this can be the major problem with turnarounds); it rewards a laid-out, quantifiable structure. Once that changed, so did the stock. The 400 percent return was the consequence, not the goal. What set the GE breakup in motion wasn't a new product or a market shift. It was leadership. Larry Culp saw what his predecessors refused to acknowledge. GE didn't need to be fixed. It needed to be stripped back. For decades, successive CEOs measured success by size—more divisions, more deals, more complexity. Culp reversed that thinking and proved that focus, not scale, is what drives shareholder return. Under Welch and Immelt, GE had become a monument to corporate ego. Diversification was seen as strength, even as the market lost the ability to value the parts. Culp understood that investors don't want a riddle. They want clean stories, clear numbers, and defined upside. This same leadership vacuum now exists at Boeing. I laid that out earlier this year in a piece calling for a rockstar CEO to take the reins. The lesson applies across sectors. If leadership isn't aligned with structure, value will stay hidden. The GE breakup worked because someone was finally willing to make hard decisions. GEV Vs S&P Post Spinoff Why Most CEOs Still Resist The GE Breakup Playbook Despite the success of the GE breakup, most CEOs still avoid this path. Not because it lacks merit, but because it requires a level of self-awareness that many don't possess. Breaking up a business means admitting that the structure you built no longer serves shareholders. That's a hard pill to swallow for executives whose careers were spent expanding, acquiring, and defending size as a strategy. The diversification myth still holds power. It gives the illusion of stability while masking underperformance. The market doesn't want blended results. It wants exposure to what works, without the drag of what doesn't. The real reason more companies don't follow GE's lead is simple. Change threatens control. A breakup reduces influence, reshapes org charts, and opens management to scrutiny. So instead of running toward structural change, most CEOs run from it. That choice may protect their tenure, but it leaves shareholder value locked in the shadows. The Investor's Edge The GE breakup reminds us where real alpha lives. It is not found in low multiples or discounted cash flows alone. It is found in structure, timing, and the presence of a catalyst. A cheap stock without change is just a value trap and I always speak about cheap stocks becoming cheaper. A misunderstood business in the middle of a structural shift? That's an opportunity. This is what I wrote about in Price Catalysts: 'Value without a trigger is just dead money.' The market doesn't reward potential. It rewards movement. That's why the GE story mattered. The setup was there for years—misunderstood assets, bloated overhead, misaligned capital. But only when the structure changed did the return appear. At The Edge, this is where we focus. We don't chase momentum or screen for what's cheap. We look for businesses on the verge of transformation. Spin-offs. Restructurings. Activist pressure. Forced selling. These are not stories. They're setups. GE wasn't a surprise to those watching the structural pressure build. It was a long-awaited release of value the market had simply stopped believing in until it couldn't ignore it anymore. GEHC Vs S&P Post Spinoff The GE Playbook Is Public The GE breakup is no longer a case study. It's a playbook. Every CEO and board now has a real-world example of what happens when structural change meets disciplined leadership. Mediocre boards can't pretend anymore. You don't need a new product, a market shift, or the perfect macro backdrop. You need a willingness to rethink what you've built and the courage to unlock what's already there. The same logic applies to other conglomerates hiding value. Boeing still carries too much weight from its disjointed divisions. Johnson & Johnson took a step in the right direction but stopped short of full separation. Consumer giants with sleepy product lines and overgrown portfolios are no different. You don't need new tech. You need new thinking. The GE breakup didn't invent value. It revealed it. And it showed that the fastest way to deliver shareholder returns is often the hardest, changing the very structure that once defined you. Act Before The Market Forces You GE waited until it had no choice. Most companies do. But the GE breakup shows what happens when the right leadership acts before the market demands it. The value was always there. Value release sometimes needs a catalyst. If you're running a company sitting on undervalued assets, you have a decision to make. Wait until you're forced into action or lead the revaluation yourself. Because if you don't unlock the value, someone else will. And when they do, it won't be on your terms. The playbook is open. Time is not on your side.
Yahoo
09-07-2025
- Business
- Yahoo
Intel Corp. (INTC) Surges 7.23% as Investors Cheer Restructuring Plan
Intel Corporation (NASDAQ:INTC) is one of . Intel Corp. rallied by 7.23 percent on Tuesday to close at $23.59 apiece as investor sentiment was buoyed by its ongoing corporate restructuring plan to claw back to profitability. Part of the move will see 529 jobs laid off across four major campuses in Oregon beginning July 15, the company said. The layoffs will affect employees at the Aloha, Hawthorne Farms, Ronler Acres, and Intel Jones campuses in Hillsboro. 'We are taking steps to become a leaner, faster, and more efficient company. Removing organizational complexity and empowering our engineers will enable us to serve the needs of our customers better and strengthen our execution,' Intel Corporation (NASDAQ:INTC) said. 'We are making these decisions based on careful consideration of what's needed to position our business for the future, and we will treat people with care and respect as we complete this important work,' it added. A technician soldering components for a semiconductor board. The recent job cuts form part of the company's plan to reduce its workforce by 15 to 20 percent, citing affordability challenges and its current financial position. While we acknowledge the potential of INTC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
08-07-2025
- Business
- Bloomberg
Pfizer's Reputation Chief Leaving as Company Shuffles Executives
Sally Susman, who has presided over Pfizer Inc. 's public communications for nearly two decades, will leave the company this year as part of a broader corporate restructuring. Susman's work as chief corporate affairs officer will be split among five executives at the company, Chief Executive Officer Albert Bourla said in a companywide email Tuesday that described the move as a mutual decision. Four of her top deputies will also leave the company, according to a person familiar with Pfizer's plans.
RNZ News
17-06-2025
- Business
- RNZ News
FMA confirms job cuts
Photo: RNZ / Quin Tauetau The country's leading financial market regulator has confirmed it cut 20 jobs in a recent backroom restructuring to cut costs. RNZ business revealed the move in March and the Financial Markets Authority said the job losses have not compromised its priorities. The FMA said it had reorganised its corporate and other support functions. It said some staff took voluntary redundancy, and others redeployed within the FMA, but did not detail if there were forced redundancies. It now has a staff of 350 from 370 previously. The Authority's executive director transformation and operational delivery, Kari Jones, said the agency continued to deliver priorities in a financially sustainable way, and was ensuring its people were supported through the process. It was not clear how much the FMA had refined its balance between rule enforcement and consumer protection on the one hand, and improving finance industry relations on the other, which were said to be a cause of tension within the organisation.
Forbes
17-06-2025
- Business
- Forbes
How To Transition From Captive To Independent Technology Services
Suresh is the Cofounder & Chairman of Mindsprint, as well as the Cofounder & CEO of Nupo Ventures. Both are businesses of Olam Group. Corporate restructuring often presents organizations with what appears to be straightforward strategic shifts. However, having recently navigated the transition from a captive technology and shared services provider (that is, a wholly owned internal unit) to an independent business unit focused on new customer acquisition, I've observed the opposite: The operational, cultural and human elements of this change create a multidimensional challenge that requires careful orchestration and thoughtful leadership. The transition requires concurrent change at multiple levels, namely: building new capabilities, onboarding people with relevant experience to augment leadership, strengthening, streamlining and defining signature processes, redefining an operating model in line with new norms, redesigning the organizational structure, focusing on strengthening the culture to align with the new direction and finally—but more importantly—building a purpose, vision and strategic plan to achieve success as an independent technology services company. While each of the elements above has its own challenges, I would like to highlight the nuances around culture and people (old versus new). Services are all about people, and hence, it is critical to have the right mix at various levels, especially senior and middle management, who carry leadership responsibilities. As we set out to refine the structure and onboard people to augment the new capabilities we need, there were two things we had to be mindful of: (1) how do we perfectly blend the teams and ensure they live the values and build the culture we want and (2) how do we manage the classic "old versus new" dynamic that arises in any organization experiencing a large influx of people from outside. As a captive, our culture was different; it was more influenced by the larger organization and shared across business units and functions. All employees were aligned to a strong purpose, had a clear sense of identity and developed deep personal relationships with business and functional stakeholders. They were clear in their pursuit of serving them. We were respected and appreciated for our domain knowledge and our alignment with business goals. However, a well-functioning captive could, over the years, become complacent, leading to weak processes and poor governance. Tolerance for failure tends to be higher; internal stakeholders may forget and forgive—you get a bit of a long rope. The cultural challenge we faced was transforming a legacy captive mindset into one that is customer-obsessed and focused on customer delight and outcomes. It didn't take long to realize that our captive customers, soon after the restructuring, began behaving like any other new customer. Every dollar earned was as good as new business—nothing was guaranteed in perpetuity. We had to compete to win, govern to excel and deliver to delight them in ways very different from our captive past. Internally, we had to restructure to serve and consistently emphasize an attitude of customer centricity and obsession in serving our good old friends. This mindset is crucial to triggering all the other changes required to operate as an independent services provider, building strategic partnerships with our customers, both old and new. The second challenge is promoting objectivity in all our debates and discussions against the backdrop of diverse perspectives emerging at different levels, driven by a significant change in the mix of old and new talent. We had to onboard people at senior and middle levels to build and lead new functions, drive change management and strengthen internal processes. Regardless of the industry or company, when there is a heavy mix of new and old talent, divides often emerge along classic fault lines: the "old" believing the "new" don't understand the company or business, and the "new" thinking the "old" have been doing things the wrong way. If not addressed early, these divides can lead to a dysfunctional organization working at cross purposes, confusing the lower levels and diluting an outcome-based approach, ultimately putting the vision and goals at risk. Driving consensus in such scenarios becomes very difficult, and resources can be drained by endless debates, causing you to miss precious opportunities for change. First, it all starts with a purpose, vision and a strategic plan that clearly defines why you are in business, what your vision is and what your goals are. The approach to building a business needs to be understood by everyone in the organization. While, as a captive, it was sufficient to align with the group business strategy, in our independent journey, it was critical to understand our own strategy—how we differentiate, what capabilities we build and which markets and segments we serve. Second, you must reinforce the key tenets of the transition from a captive to an independent organization. Without this, change will not happen. What does this mean? For us, we examined: What was our culture, and what do we aspire to become? Do our values reflect our purpose and vision? What will change—is it the structure, the roles, the responsibilities or the KPIs? You need to clarify how you will make this transition: What the new operating model looks like, what your signature processes are and how you will measure progress. All of this must be clearly laid out. Finally, a heightened awareness of the need for objectivity in all discussions will help manage the friction between the "old" and the "new." You must constantly remind managers to lead with this mindset in both discussions and decisions. You have to keep your purpose, vision and goals front and center. The "old" must be encouraged to leave behind the irrelevant parts of the past, retain the best and move forward. The "new" must bring in fresh perspectives while showing empathy toward legacy practices—after all, those practices existed for a reason. Ultimately, this presents a truly compelling value proposition for both the "old" and the "new." The transition from being part of a large group (as a captive) to shaping your own destiny is exhilarating. It's a rare opportunity to operate with the mindset of a cofounder and bring your shared vision to life. In return, you gain an immensely rewarding career, rich with learning at every step of the journey. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
