GE Aviation to cut workforce by up to 13,000 jobs, or 25%
The aviation unit of General Electric says it will make "permanent reductions" of up to 25 per cent of its global workforce this year, noting the sharp contraction in global travel because of the new coronavirus.
General Electric Co said on Monday it was planning to cut the global workforce of its aviation unit this year by as much as 25%, or up to 13,000 jobs, including both voluntary and involuntary layoffs, citing prolonged aircraft reduction schedules caused by the coronavirus pandemic.
The job cuts are the latest mounting woes for the aviation sector that are now expected to last into 2021 as U.S. passenger air travel demand has fallen by 95%.
Last week, Boeing Co said it would cut 10% of its global workforce, or 16,000 jobs, as it has slowed some production rates, while supplier SpiritAero Systems Holdings said on Friday it is cutting another 1,450 jobs in Kansas.
GE shares were down 4% on at $6.23.
The GE Aviation job cuts are part of the $3 billion in cost and cash savings announced by the company last month and include previously announced cuts, including a 10% cut to its U.S. workforce announced in March.
GE Aviation Chief Executive David Joyce told employees on Monday the "deep contraction of commercial aviation is unprecedented, affecting every customer worldwide. Global traffic is expected to be down approximately 80% in the second quarter."
GE Aviation previously issued furloughs impacting about 50% of its U.S. maintenance, repair and overhaul employees and new engine manufacturing. It also imposed a hiring freeze, canceled a salaried merit increase and dramatically reduced non-essential spending.
Neither GE nor Boeing opted to apply for government assistance from a $17 billion U.S. Treasury fund for national security related companies. Boeing said it would rely on $25 billion raised in a new bond offering.
Boeing Chief Executive Dave Calhoun said last week he expects it will "take two to three years for travel to return to 2019 levels and it will be a few years beyond that for the industry to return to long-term growth trends."