European aerospace company, Airbus recently said that it is finalising a restructuring plan which would include massive job cuts. Airbus plane output will be 40% lower for two years compared to pre-crisis plans,confirmed the company Chief Executive while speaking to a newspaper.
According to a Bloomberg report, Europe’s largest plane manufacturer Airbus SE is meeting with European labor unions this week as it prepares to slash thousands of jobs and scale back its planemaking operation for a prolonged downturn.
Airbus’s business has been severely damaged by a 40% drop in its 55bn euro jetliner business during the coronavirus. The company is now forced to counter the damage swiftly with the restructuring plan.
It has said it will announce job plans by the end of July, but needs to brief unions and governments on any major overhaul before a two-week “quiet period” ahead of its July 30 earnings.
While confirming the restructuring to German newspaper Die Welt, company Chief Executive Officer Guillaume Faury said, “For the next two years – 2020/21 – we assume that production and deliveries will be 40% lower than originally planned.”
Output will return to normal by 2025, while depressed deliveries are expected to catch up with production by the end of 2021, Faury added in the interview published on Monday.
Earlier, Reuters had reported that Airbus was looking to hold underlying jet output at 40% below pre-pandemic plans for two years as the basis for any restructuring. However, tt has until now said it was cutting by a third on average.
Industry sources are predicting that according to the company figures, there can be about 14,000 to 20,000 phased job cuts based on the 40% target.
One person familiar with the Airbus layout said anything below 25,000 cuts could be seen as conservative in the light of output plans. Unions have warned against over-reaction, however. It is being expected that helicopter and defence divisions, which manufacture some parts on behalf of the jetliner parent, will be affected.
Faury did not comment on specific restructuring plans but said the company would leave no stone unturned to reduce costs.
“It’s a brutal fact, but we must do it. It is about the necessary adjustment to the massive drop in production. It’s about securing our future,” Faury told Die Welt.
Airbus is expected to rely heavily on early retirements, with some 37% of its total workforce of 135,000 scheduled to retire over the next decade.
Airbus has its main plants in France, Germany, Spain and Britain. Laws in some of those countries require voluntary schemes to be exhausted before any forced redundancies. Faury told staff in April all available measures would be studied.
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