European aircraft manufacturer Airbus is reported to be eyeing substantial layoffs amid the global downturn in travel demand. The planemaker was reported by the Telegraph yesterday to be eyeing up to 10,000 job losses in a bid to cut costs.
Up to 10% of workforce could go
European aerospace giant Airbus is reportedly looking to ax as many as 10,000 jobs in a bid to cut costs. As reported in the Telegraph yesterday, the planemaker is due to hold a conference call with its chiefs to figure out where to make these cuts. The call is scheduled for next week, although it may be the end of the month before unions are briefed on the proposals.
One source speaking to the Telegraph described the job cuts as “imminent and savage,” likening the situation to that at rival manufacturer Boeing. The US aerospace company previously cut 10% of its workforce to save money during the crisis, and something similar is likely to come out of Airbus too.
An Airbus spokesperson explained the situation to Reuters, saying,
“Over the last few weeks, Airbus has implemented a number of financial, operational and social measures in order to adapt to the severe health and economic impact of the COVID-19 crisis.
“The company will continue to take all necessary measures to ensure the future of Airbus in cooperation with its social partners.”
Guillaume Faury, chief executive at Airbus, is expected to provide an update to managers this week. Just last week, he told staff that the company’s survival was at stake, saying it was “in the midst of the gravest crisis the industry has ever known.” Now, it seems drastic measures may be necessary to ensure its long-term financial health.
No disclosure until end of May
Under French law, no restructuring plans are allowed to be announced until a thorough consultation is undertaken. This needs to be done in partnership with trade unions and will take until at least the end of the month to complete.
With 135,000 staff worldwide, many will be feeling apprehensive about where the cuts will hit. Although Airbus has said it’s too early to talk numbers, the order of magnitude is highly likely to run into the thousands.
Airbus has already temporarily furloughed a number of employees and is meeting with unions today to discuss progress on more furlough schemes. The company is relying on government funding for these furloughed workers, as France, Britain and Germany have all put schemes in place to reduce the cost of keeping these workers on the books.
Executive ‘population review’
Reuters further reports that the company has already begun a review of its executive population. This was starting to take shape even before the challenges presented by COVID-19, as Faury sought to reverse a sharp growth in the number of senior employees at the company.
Aside from execs, there are likely to be fewer requirements for workers on the factory floor. Airbus has already disclosed deep production cuts, forecasting a prolonged slump in demand with fewer new jets required.
Airbus could look at early retirements, as a large proportion of its workers are approaching the required age. Reuters says that an estimated 37% of the workforce is within 10 years of retiring, many of whom will not be replaced as the company moves towards a more digital future.