Coronavirus Updates: Airbus to layoff 15,000 workers due to low demand

Airbus layoff coronavirus pandemic
Image Source

Aircraft manufacturer Airbus has announced that it will layoff around 15,000 employees as demand for new aircraft declined due to the coronavirus pandemic.

Airbus will layoff the 15,000 workers, which represent more than 10% of its total workforce, over the next 12 months. The company cited plunging demand for new aircraft due to the travel crisis caused by the coronavirus pandemic.

Job Cuts at Airbus

In a statement, the aircraft producer said the move was in response to a 40% drop in activity in its commercial aircraft business in recent months, and expectations that the recovery will be slow.

The firm stated: “Airbus is grateful for the government support that has enabled the company to limit these necessary adaptation measures. However with air traffic not expected to recover to pre-Covid levels before 2023 and potentially as late as 2025, Airbus now needs to take additional measures to reflect the post Covid-19 industry outlook.”

Airbus, which has 134,000 employees globally, is based in France but has production facilities in Germany, Spain and the UK.

ADVERTISEMENT

The job cuts will most significantly affect the company’s France and Germany facilities, with approximately 5,000 employees to be let go in each country. The UK site will lose 1,700 jobs while Spain will cut its positions by 900.

The remaining layoffs will be conducted at other sites around the world.

However, Airbus pointed out that it will try to lessen the number of layoffs by offering voluntary departures, early retirement and long-term partial employment programs.

Airbus chief executive officer (CEO) Guillaume Faury said: “Airbus is facing the gravest crisis this industry has ever experienced. The measures we have taken so far have enabled us to absorb the initial shock of this global pandemic.”

“Now, 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,” Faury added.

France’s support

In March, Airbus was able to secure a €15 billion credit facility to boost its position amidst the pandemic. France also brought forward military orders for Airbus refueling tankers and helicopters as part of its $17 billion pledge to support the aviation industry.

According to French Economy Minister Bruno Le Maire, the government pledge will be able to secure the jobs of 100,000 workers in the aviation industry. The minister added that the funding will be able to help French firms keep up with aircraft makers, including China’s COMAC and the US’ Boeing.

Airbus chief executive officer (CEO) Guillaume Faury tweeted: “The plan announced by France is solid and the right response to the challenges.”

“It will help us soften the blows in the short-term, while preserving our ability to rebound when the time comes. At Airbus, in the face of this crisis, we are doing everything we can to protect our business & the industry,” Faury wrote.

Airbus is considered half of a duopoly when it comes to aircraft production, with the other half being the US firm Boeing, whose 737 MAX jets have been grounded even prior to the pandemic.

In April, Boeing offered its employees buyouts as it forecasts recovery from the coronavirus pandemic to take years. The offer was announced via memo to employees from Boeing chief executive officer (CEO) Dave Calhoun.

According to Calhoun, the company is offering voluntary layoff packages that provide exiting employees with pay and benefits in order “to reduce the need for other workforce actions.”

ADVERTISEMENT