(Reuters) - General Electric Co GE.N said it is delaying construction of the largest part of its new $200 million headquarters in Boston to save money as new Chief Executive John Flannery looks to curtail costs.

The logo of General Electric Co. is pictured at the Global Operations Center in San Pedro Garza Garcia, neighbouring Monterrey, Mexico, May 12, 2017. REUTERS/Daniel Becerril

The company will cut millions of dollars from the project cost by postponing construction of a 12-story tower until 2019 as part of a second phase, rather than starting immediately, spokesman Jeff Caywood said.

GE is moving ahead with renovations of two smaller buildings and public amenities in the area as planned.

The company would have paid a premium in construction costs by building the tower at the same time, Caywood said.

GE would not disclose the exact savings but Caywood said “it’s in the millions of dollars.”

The scope of the development, at 15 Necco Street near Boston’s waterfront, is not being changed and GE still expects to employ 800 people there when the project is finished in mid-2021.

The company is using nearby offices in the interim.

Renovation of the two brick buildings, totaling 95,000 square feet, is scheduled to be finished by mid-2019.The 295,000-square-foot tower is now scheduled to be completed in mid-2021, rather than in 2019.

“We are committed to Boston and look forward to moving to GE Innovation Point, which will be a hub for innovation and the industrial internet,” Ann Klee, the GE vice president in charge of the Boston development, said in a statement.

The delay comes as Flannery is reviewing GE’s operations with an eye toward cutting costs.

The company has said it expects to deliver as much as $2 a share in earnings next year but that it may miss the target if markets worsen. It also is focused on cutting $1 billion in costs next year.

The Boston Globe newspaper first reported GE's decision to delay the tower construction. (bit.ly/2vOBObi) GE told employees about the decision late Tuesday.