Airbus starts biggest-ever restructuring with 15,000 jobs to go

Airbus SE embarked on the most extensive restructuring in its history, setting out plans to cut 15,000 civil-aerospace jobs worldwide as it attempts to steer through the crisis brought on by the coronavirus pandemic.

The European manufacturer will eliminate more than 10,000 positions across its main bases in Germany and France, part of an 11% reduction in global headcount, according to a statement on Tuesday.

Chief Executive Officer Guillaume Faury has said the company’s output will be 40% lower than expected for two years due to a dramatic slump in demand for aircraft, and has previously warned it is bleeding cash.

“The crisis the aviation sector is facing will be of a length and magnitude that calls for more structural and wide-ranging actions,” the CEO said in a video message. “We need to act now by adapting our workforce to reflect the new situation.”

Airbus will look to cut 1,700 jobs in the UK, 900 in Spain and about 1,300 in other countries by mid-2021 at the latest, the jet maker said. Voluntary measures such as early retirement will be the main part of the process, with compulsory cuts a “last resort,” Faury said.

The plans will be subject to agreement with the relevant unions, and faced almost instant opposition by the French government. The extent of the job cuts is “excessive,” the finance ministry said in a statement, adding that the company must do all it can to limit the number of forced retrenchments.

- Aircraft Slump -

Caught in an aircraft-market slump that could last as long as five years, Airbus is striving to bring down costs while avoiding political and labor tensions in its home nations. Airbus has about 135,000 employees globally, with almost 81,000 of those in the hard-hit commercial-aviation division.

The move marks the latest step in adjusting a business that had been expanding for more than a decade before the rapid spread of Covid-19 ushered in widespread travel bans and the subsequent grounding of airline fleets. While some countries are beginning to reopen borders, travel isn’t expected to return to pre-crisis levels before 2023 at the earliest, Airbus said.

- France tells Airbus to minimize compulsory job cuts -

The French government urged Airbus on Wednesday to make as few compulsory redundancies as possible after the European aircraft maker announced it was culling 15,000 posts in Europe to survive the coronavirus crisis.

Junior Transport Minister Jean-Baptiste Djebbari said the government estimated 2,000 of the planned 5,000 cuts in France could be saved through a long-term reduced-work scheme and because of government investment in next-generation green jets.

“The state urges Airbus to ensure that there are as few forced redundancies as possible,” Djebbari told BFM TV. “Airbus faces a very difficult period ahead. The state stands beside Airbus, and beside Air France.”

Djebbari confirmed Air France planned to shed nearly 7,600 jobs in a restructuring to be announced this week, including 1,000 at its regional unit Hop! The figure was presented at a company meeting on Tuesday, he said. The French government has agreed state aid worth €7 billion ($7.9 billion) for Air France to soften the economic shock of the coronavirus pandemic. Djebbari also urged Air France to minimize compulsory redundancies.

“It’s not €7 billion to pay for redundancy programmes. It’s 7 billion for survival, to pay salaries at the end of the month,” the minister said.

The French state owns 11% of Airbus and 14.3% of Air France KLM.

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