Airbus to Cut 15,000 Jobs - The New York Times

The European aircraft giant said it didn’t expect air travel to return to pre-virus levels till perhaps 2025.

Airbus A350 aircraft at the company’s factory near Toulouse, France, this month.  Credit... Stephane Mahe/Reuters

PARIS — The coronavirus pandemic continued to wreak havoc on global aviation as the aerospace giant Airbus announced Tuesday that it would cut nearly 15,000 jobs across its global work force, the largest downsizing in the company’s history.

Citing a 40 percent slump in commercial aircraft business activity and an “unprecedented crisis” facing the airline industry, Airbus said it would slash around 10 percent of its jobs worldwide, with layoffs hitting operations in France, Germany, Spain and Britain.

The chief executive, Guillaume Faury, had been preparing employees for hard times in a series of recent memos in which he warned it would be necessary to adapt to a “lasting decline” in the demand for airliners. The company said Tuesday that it didn’t expect air travel to return to pre-virus levels before 2023 and potentially not until 2025.

“Airbus is facing the gravest crisis this industry has ever experienced,” Mr. Faury said in a statement Tuesday. “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 layoffs are a stunning reversal of fortune for the world’s largest plane maker, which was founded 50 years ago.

In February, as its U.S. rival, Boeing, stumbled from the yearlong grounding of its 737 Max plane, Airbus faced a large backlog of orders. Production of its A320 jet — the main competitor to the 737 Max and the bulk of Airbus’s commercial business — was months behind schedule because of slowdowns at some of its European factories.

As the coronavirus pandemic brought much of global air travel to a halt, Airbus’s fortunes tumbled with the rest of the aviation industry. Airlines are now planning for years of reduced passenger demand, and this means less need for new planes.

The company is shedding 5,000 of its 49,000 employees in France, 5,100 of 45,500 positions in Germany, 900 of 12,500 workers in Spain and 1,700 of 11,000 positions in Britain. Another 1,300 will be cut at other Airbus sites around the world, and about 900 are part of a previously planned restructuring.

The job losses will need to be discussed with labor unions at its European operations, Airbus said, and are expected to be completed no later than next summer. The company will seek to meet its goals through voluntary departures, early retirement and long-term partial unemployment schemes where appropriate, it said.

The French government, which has been trying to prevent waves of layoffs by supporting businesses, called the number of layoffs “excessive.” “We expect Airbus to use tools made available by the government to reduce the number of job cuts,” a spokesman at the Finance Ministry said.

Airbus had already begun cutting production of its popular A320 single-aisle aircraft and A350 long-range jets in April by around a third, when quarantines to contain the pandemic were in effect across Europe. That was a 40 decline from the number of planes the company had planned make in 2020 and 2021.

Research published last week by the International Air Transport Association warned that airlines in Europe were set to lose $21.5 billion in 2020 as passenger demand plunged by over half because of continued global travel restrictions.

Boeing announced 16,000 job cuts in late April after its chief executive, David L. Calhoun, said the coronavirus had created “utterly unexpected challenges.”

Revenue for Boeing’s commercial aircraft had slumped nearly 50 percent, and the plane maker received just 49 new orders and had 196 cancellations between January and March. Boeing recently got approval for test flights of the revised 737 Max.

Airbus is having troubles despite an enormous aid program for the aviation industry announced in June by the French government, featuring a 15 billion-euro support package (almost $17 billion) to bolster Air France, Airbus and major French parts suppliers.

But while the government called on companies receiving aid not to resort to job losses, no rules forbade layoffs.

“Airbus is grateful for the government support that has enabled the company to limit these necessary adaptation measures,” Airbus said.

“However, with air traffic not expected to recover to pre-Covid levels before 2023 and potentially as late as 2025,” the statement continued, “Airbus now needs to take additional measures to reflect the post-Covid-19 industry outlook.”