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General Electric to cut 10,000 aviation jobs
[NEW YORK] General Electric (GE) announced Monday it will cut an additional 10,000 jobs from its aviation sector as the coronavirus pandemic decimates the industry, forcing companies to cancel orders.
The cuts will be a mix of voluntary departures and layoffs and come after an initial wave of 2,600 job cuts in March, GE said in a statement.
The company aims to reduce its aviation employment base by 25 per cent, or some 13,000 employees.
The austerity programmw, which will affect all geographic zones, is reflective of the rough time the entire aviation sector is going through.
Boeing announced last week that it was cutting 16,000 jobs, about 10 per cent of its workforce, in civilian aircraft manufacturing.
It also heavily reduced production of its long-haul 787 and 777/777X planes. The company has yet to announce a date when it will resume assembly of its flagship 737 MAX aircraft. Airbus has similarly reduced production.
GE is directly affected by these decisions, as it makes plane engines for Boeing and Airbus.
Global air traffic is expected to fall 80 per cent during the second quarter compared to February, GE said in a letter to 52,000 employees.
"To protect our business, we have responded with difficult cost-cutting actions over the last two months," chief executive officer David Joyce said in the letter.
"Unfortunately, more is required as we scale the business to the realities of our commercial market."
The job cuts are part of a US$3 billion savings plan that will be implemented this year.
In addition, half of the employees in charge of aviation maintenance and repairs are out of work for three months.
Hiring has also been frozen and bonuses cancelled.
GE, which makes aircraft engines in a joint venture with the French company Safran, CFM, saw revenue fall by eight per cent to US$20.52 billion in the first quarter.
The aviation division's revenue plunged 13 per cent to US$6.90 billion, while its orders were down 14 per cent.
The group, which warned at the end of April that the worst was yet to come, has not sought the financial aid that US President Donald Trump has promised to companies in order to protect jobs.