Airbus Starts Record Restructuring With 15,000 Jobs to Go

imageStock Markets2 hours ago (Jun 30, 2020 02:45PM ET)

(C) Bloomberg. An employee works on a section of fuselage inside the new Airbus SE A320 passenger aircraft family assembly line hangar in Hamburg, Germany, on Tuesday, Oct. 1, 2019. An escalating battle over aircraft subsidies between the U.S. and the European Union threatens to damage both sides, said Airbus Chief Executive Officer Guillaume Faury.

(Bloomberg) — Airbus SE (OTC:EADSY) embarked on the most extensive restructuring in its history, setting plans to cut 15,000 jobs worldwide to steer the planemaker through the crisis brought on by the coronavirus pandemic.

The European manufacturer will eliminate more than 10,000 positions across its main bases in Germany and France, part of an 11% reduction in global headcount, according to a statement on Tuesday. Chief Executive Officer Guillaume Faury has said the company’s output will be 40% lower than expected for two years due to a dramatic slump in demand for aircraft, and has previously warned it is bleeding cash.

“The crisis the aviation sector is facing will be of a length and magnitude that calls for more structural and wide-ranging actions,” the CEO said in a video message. “We need to act now by adapting our workforce to reflect the new situation.”

Airbus will look to cut 1,700 jobs in the U.K., 900 in Spain and about 1,300 in other countries by mid-2021 at the latest, the jet maker said. Voluntary measures such as early retirement will be the main part of the process, with compulsory cuts a “last resort,” Faury said.

The plans will be subject to agreement with the relevant unions, and faced almost instant opposition by the French government. The extent of the job cuts is “excessive,” the finance ministry said in a statement, adding that the company must do all it can to limit the number of forced retrenchments.

Aircraft Slump

Caught in an aircraft-market slump that could last as long as five years, Airbus is striving to bring down costs while avoiding political and labor tensions in its home nations. Airbus has about 135,000 employees globally, with almost 81,000 of those in the hard-hit commercial-aviation division.

The move marks the latest step in adjusting a business that had been expanding for more than a decade before the rapid spread of Covid-19 ushered in widespread travel bans and the subsequent grounding of airline fleets. While some countries are beginning to reopen borders, travel isn’t expected to return to pre-crisis levels before 2023 at the earliest, Airbus said.

(Updates with CEO comment starting third paragraph)

(C)2020 Bloomberg L.P.

Airbus Starts Record Restructuring With 15,000 Jobs to Go

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