GE has unveiled plans to reorganize its energy business into three separate businesses in order to reduce layers and decrease cost.

The three new businesses, GE Power & Water, GE Oil & Gas and GE Energy Management, will report directly to the company’s chairman and CEO Jeff Immelt.

The spinoff will be effective in the fourth quarter of 2012 and will be phased out by the end of 2012.

GE chairman and CEO Jeff Immelt said the energy business had a solid quarter with earnings up 13% and has a big backlog of great products.

"Removing layers is one way to reduce costs and increase our speed, focus and agility in the marketplace so we serve customers better," Immelt added.

GE Power and Water, led by senior vice president and power and water CEO Steve Bolze, is headquartered in New York and will have about 41,000 employees and planned revenue of $28bn in 2012.

GE Oil and Gas, led by senior vice president and oil and gas CEO Dan Heintzelman, is headquartered in Italy and will have 33,000 employees and revenue of $15bn in 2012.

GE Energy Management, led by senior vice president and energy management CEO Dan Janki, is headquartered in Georgia and will have 27,000 employees and planned revenue of $7bn in 2012.