Airbus, in 'Gravest Crisis,' Cuts 11% of Jobs -- WSJ

By Benjamin Katz 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 1, 2020).

Airbus SE said it would cut 15,000 jobs across its commercial aircraft division, the biggest restructuring in the plane maker's history, citing what it expects to be the Covid-19 pandemic's yearslong impact on the aviation sector.

The majority of the cuts, which amount to about 11% of the company's total workforce, will be mostly in France and Germany, Airbus's main manufacturing sites.

The move comes after months of stalled air traffic that has resulted in a run of airline bankruptcies and restructurings around the world, including moves to reduce fleet numbers and cancel orders for new planes.

A recovery in air traffic to pre-pandemic levels isn't expected before 2023 and could come as late as 2025, Airbus said.

"Airbus is facing the gravest crisis this industry has ever experienced, " Chief Executive Guillaume Faury said. "We must ensure that we can sustain our enterprise and emerge from the crisis as a healthy, global aerospace leader, adjusting to the overwhelming challenges of our customers."

The move follows that by Boeing Co. which outlined plans to reduce its workforce by 10%.

The aviation industry has been suffering as border restrictions and fears by passengers of contracting the virus have stymied air travel. Airlines aren't expecting a full recovery soon, with the economic fallout from the pandemic set to weigh on demand in the coming years.

The job losses in the sector add to those already being cut at airlines across the world, including 12,000 at British Airways and 6,000 at Australia's Qantas. Deutsche Lufthansa AG has said it may need to cut as many as 22,000 positions.

American Airlines Group Inc. and United Airlines Holdings Inc. have both said they are looking at cutting 30% of management and administrative staff to weather the crisis.

In addition to the 15,000 cuts, Airbus has already outlined pre-pandemic plans to shed 900 jobs at its Premium Aerotec business in Germany. A separate restructuring of its defense and space business is also ongoing and will result in a reduction of about 2,600 staff.

The 15,000 jobs still need to be negotiated with unions, Airbus said, with an aim to reach agreements by autumn and complete the restructuring by summer next year.

Write to Benjamin Katz at [e-mail]

(END) Dow Jones Newswires

July 01, 2020 02:47 ET (06:47 GMT)

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