Neutron Jeff: GE CEO to slash NBC Universal costs

Jeff Immelt, General Electric Co.'s (NYSE: GE) CEO, has never shown the appetite for cutting underperforming divisions the way his predecessor, Jack Welsh, did. All of that changed in the blink of an eye when GE division NBC Universal announced it would cut its expenses by $750 million.

Immelt seems to have tired from the drag that the entertainment unit puts on GE's stock. Since announcing earnings, GE's stock has dropped from $36.30 to $35.50. Most of GE's units did well, but NBC Universal did not. Segment profit at NBC Universal dropped 10% in the last quarter to $542 million, making it the only one of of GE's six reporting divisions to show a decline in profit.

GE's press machine made it appear as if Jeff Zucker, the entertainment unit's No. 2 executive, was the architect of the cuts. No one with any sense would believe that. Mr. Immelt is chagrined by the fact that GE's stock has gone nowhere since he took over from Mr. Welsh.

NBC Universal is admitting that news is no longer an area of growth and most cuts will come in the news division. The company will also cut its budget for the 8 PM hour of broadcasting.

NBC Universal will also put some money into its digital business - $150 million over the next two years. To compete with other online video ventures, that is a drop in the bucket.

The restructuring at NBC is not over.

Douglas McIntyre is a partner at 24/7 Wall St.