Daily Management Review

Restructuring Plans, Including Job Cuts, Being Considered By Airbus: Reports


Restructuring Plans, Including Job Cuts, Being Considered By Airbus: Reports
Anticipating the prolongation of the coronavirus crisis, European plane maker is now considering further restructuring plans that include the possibility of “deep” job cuts. The company had already furloughed thousands of workers, said reports quoting industry sources said. The reports however clarified that the company had not come to any decision yet.
While indicating that no decisions will be made before the summer, the largest aerospace group of Europe has also indicated that layoffs are not off the table.
But in recent weeks, the hit to the global airline industry by the pandemic has become more evident with carriers and suppliers approaching governments for help. 
After issuing a warning last month that the very existence of the company was at stake due to a slump in demand, recent reports have indicated that the company’s Chief Executive Guillaume Faury will be updating the other senior management of the company on the issue this week.
According to French law, restructuring plans cannot be disclosed internally by the Toulouse-based Airbus prior to discussing them with the trade unions through a formal exercise. That is not expected to take place before the end of the current month.
But Reports quoting company sources said that the company said its senior executives would be trying to make as much sense as possible of the weekly internal briefing of Faury in order to get an idea of what he is planning about jobs.
“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,” an Airbus spokesman told the media. “The company will continue to take all necessary measures to ensure the future of Airbus in cooperation with its social partners.”
The company is scheduled to meet trade unions this week to discuss progress on furlough schemes, said reports quoting French union sources. There can be announcement of more temporary furloughs in the coming week.
Forced redundancies and expected deep cutbacks could be included in the restructuring plan, according to reports quoting one company insider.
Sources also said that even before the pandemic crisis hit the company, Faury was already examining the sharp growth in Airbus’s senior ranks and wanted to stop that. It is being expected that the company will initiate an “executive population” review as a part of that plan.
One of the reasons for the steep rise in the number of people in senior management positions in Airbus was the in-house merger of Airbus and former parent EADS in 2014 that resulted in an abundance of top jobs and a headquarters lifestyle that is being steadily wound down.
A restructuring that can be comparable to the 2007 Power8 restructuring that was implemented by the company which included 10,000 job cuts split between permanent and temporary posts could be carried out this time also, claimed a report published by Reuters last month.
But for now, government-backed furlough schemes in France, Germany and Britain is the only means that the company is currently depending on to reduce staff costs. The company had previously asked employees to take 10 days’ leave.