Boeing Deal Failure Prompts Embraer To Cut Brazil Workforce By 900

Brazilian planemaker Embraer has today revealed that it needs to trim its workforce by around 900 employees if it is to survive the current crisis. It notes that a drop in commercial aircraft demand has continued to its difficulties, but also says that disruption caused by Boeing pulling out of the partnership deal has exacerbated the problem.

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Embraer is facing a workforce trim of some 900 jobs. Photo: Embraer

900 jobs to be cut

Today, Brazilian planemaker Embraer has announced what it is calling an ‘adjustment’ to its workforce. The manufacturer is looking to trim its employee levels by some 4.5%, a figure that equates to around 900 individual jobs.

The company states that a combination of factors has caused this shrinkage. Firstly, it’s reflective of the impacts of the COVID-19 pandemic on commercial aviation. However, it has also been made more acute by the withdrawal and cancellation of Embraer’s partnership with Boeing.

Embraer workers
The planemaker also blames Boeing for the job losses. Photo: Embraer

Embraer states that this reduction in workers is absolutely necessary if it is to ensure its sustainability and engineering capacity going forward.

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Commercial aircraft demand plummets

The global downturn of travel demand has hit the commercial aircraft sector harder than any other. Indeed, Embraer delivered only four commercial jets in the second quarter of 2020. In comparison, in the same period last year, the company delivered 26.

While the company has a substantial order backlog of more than 300 commercial aircraft worth some $15.4 billion, the slowdown in orders has forced the company to take a cautious approach. It noted today that new aircraft activity was down by 75% in the first half of 2020 compared to the same period last year. Like all in aviation, Embraer needs to watch the pennies right now.

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Demand for new aircraft has plummeted amid the crisis. Photo: Embraer

However, it is not only the pandemic effects that have caused problems for the planemaker. In advance of the deal with Boeing going through, it had carved up the company to effectively separate the commercial arm, ready for the partnership to move forward.

When Boeing pulled out of the deal in late April, Embraer was left with a business that had been effectively duplicated. Now, with orders drying up and deliveries slow, the Brazilian company needs to go back to the drawing board and start rebuilding on its own again.

Trying to avoid involuntary furloughs

Embraer has insisted it is doing everything in its power to avoid involuntary layoffs. In a statement to Simple Flying today, it said that,

“Since the beginning of the pandemic, Embraer has adopted a series of measures to preserve jobs, including collective vacations, reduced working hours, furloughs, paid leave, and three voluntary dismissal plans (VDP).”

Embraer workers
1,600 workers have already opted for the voluntary scheme. Photo: Embraer

To protect the health of its workers, the manufacturer has reduced face to face work at its plants. So far, around 1,600 employees have participated in the VDPs in Brazil, it said. Although any job losses are unfortunate, 4.5% is actually very good going, compared to the proportions we’ve seen being cut elsewhere in the industry. Embraer concluded,

“The company recognizes and appreciates the commitment of those professionals who are leaving the organization and counts on the commitment of all employees to overcome the current crisis and maintain the company’s competitiveness in the global market.”

While the immediate future does not look too bright, in the longer run, Embraer is in a strong position. Its highly efficient, popular regional jets will be much in demand as the industry begins to recover.