Airbus Will Do Everything To Avoid Compulsory Layoffs

Today, Airbus CEO Guillaume Faury told French media that Airbus would try to do everything possible to avoid laying off staff. However, Faury also stated that compulsory redundancies were not entirely off the table as the manufacturer struggles to adjust to the sharp downturn in the aviation industry.

Airbus Factory staff layoffs
Airbus is hoping to avoid laying off 15,000 employees. However, it looks more likely as the crisis drags on, and too few people take voluntary leave. Photo: Getty Images

Compulsory cuts

According to Reuters, Airbus CEO Guillaume Faury is trying to be frank with Airbus staff regarding the current situation. In an interview with a French Radio station, Faury said,

“The crisis is existential. Our life as a business is potentially at risk if we don’t take the right measures. We are taking them. . . The situation is so serious, and we are faced with so much uncertainty, that I think no one can guarantee there won’t be compulsory redundancies if we’re to adapt to the situation, especially if it evolves further.”

This second verbal warning comes just weeks after Faury sent a letter to 130,000 Airbus employees informing them that compulsory layoffs were on the horizon. In the letter, Faury said, “I owe it to you to be transparent: it’s unlikely that voluntary departures will be enough.” Today’s radio interview seems to be confirming the idea that Airbus may be about to make some significant staff cuts in order to survive.

Airbus plane and employees
Airbus has already warned of 15,000 layoffs. The announcement resulted in strike action for the first time since 2008. Photo: Airbus

In a statement to Simple Flying, a spokesperson for Airbus confirmed that the comments made by Faury do not mean additional posts are at risk. Airbus previously said it would need to cut around 15,000 positions in response to a 40% decline in business. Airbus does not believe it will reach its target number with voluntary leave, so compulsory action may be taken.

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Saving money

Despite the seemingly pessimistic tone of Faury’s recent comments, he continues to say that the French manufacturer will do everything it can to cut costs without cutting jobs. Faury commented that,

There are lots of measures we can take between voluntary redundancies and compulsory redundancies.”

Since the start of the pandemic, the manufacturer has been trying to cut costs across the business to minimize the need for layoffs. In a message to Simple Flying, Airbus confirmed it had cut production rates by 40% compared to planned activity for 2020 and 2021. It has also implemented a hiring freeze to preserve existing jobs as well as cutting spending.

The company has also received significant support from several European Governments to help minimize the impact of the virus. Airbus employees worldwide have benefitted from schemes such as Furlough, Activité partielle, Kurzarbeit and ERTE. These government schemes have helped to address short-term issues and postpone the need for compulsory layoffs.

Airbus has had to reduce its production capacity by 40% to reflect the drop in demand for commercial jets. Photo: Airbus

Recovery and long term impact

And Airbus doesn’t just have to battle against a downturn in demand. The French Government provided almost $17 billion (15 billion euro) in support of the aviation industry. As a result, French workers unions such as Force Ouvriere have said they will oppose any job cuts. The opposition has already begun. Airbus workers went on strike in July to fight job cuts. This is the first time Airbus staff have gone on strike since 2008.

Airbus has some tough decisions to make soon if it is to recover as quickly as possible. While Faury may try to do everything possible to avoid layoffs, as the crisis drags on, they seem more and more necessary.

Do you think Airbus will have to lay off more staff? Will they face union trouble if they do? Let us know your thoughts in the comments.