Daily Management Review

Airbus To Cut Nearly 40% Jobs With Low Output


Drop in production, slow delivery and the ongoing pandemic crisis forces Airbus to make “necessary adjustment”.

Airbus, in an “imminent restructuring plan”, is considering to cut down “thousands of jobs”, confirmed the chief executive of the company. The discussions are in final stage as it plans to “hold output down by 40% for two years”. The new reorganisations could be expected by Wednesday, thinks sources from the union, whereby triggering “several days of talks” while the company deals with the impacts COVID-19 crisis.
According to Reuters:
“The company is expected to move swiftly to counter damage caused by a 40% drop in its 55 billion euro ($61.8 billion) jet business following the pandemic, balancing the belt-tightening against aid being offered by European governments and future priorities”.
Furthermore, the company has informed that by July end, it would come out with its plans, although at the outset it needs to go brief governments and unions of any job reduction a fort night prior to “quiet period”, a “delicate process” as termed by the company. While political sources are of the opinion that Airbus is pushing back the impact in an attempt to “avoid undermining the announcement in June of a French aerospace support package”. In the words of the Faury:
“It’s a brutal fact, but we must do it. It is about the necessary adjustment to the massive drop in production. It’s about securing our future”.
“For the next two years - 2020/21 - we assume that production and deliveries will be 40% lower than originally planned”.
He expects the output to recover to its normal by the year of 2025, while “depressed deliveries” are likely to normalise by 2021 end.
If Reuters’ reports are to be believed:
“Sources have predicted phased cuts of some 14,000 jobs based solely on the 40% output index, which takes account of labour needed for different models, or 15,000-20,000 on a broader view”.