Canadian plane and train maker Bombardier Inc announced a significant reduction of about 11% of its aviation unit workforce, amounting to 2,500 job cuts, in response to the ongoing impact of the coronavirus pandemic on the aviation industry. The pandemic has severely affected travel demand and led to reductions in production for aircraft manufacturers such as Boeing and Airbus. Bombardier cited disruptions in its supply chain and industry-wide forecasts of a 30% year-over-year decline in unit deliveries due to the pandemic as reasons for the decision.
The company, which recently divested its commercial aircraft business, is in the process of selling its rail business to Alstom for up to 6.2 billion euros, which would leave Bombardier as a “pure play” business jetmaker. With nearly 60,000 employees across its aviation and rail units, the company anticipates a charge of $40 million related to the job cuts. The International Association of Machinists and Aerospace Workers raised concerns about the layoffs, particularly in relation to the Canadian government’s emergency wage subsidy program. The union stated that Bombardier could have avoided the layoffs by extending the program, which runs through the end of August.
The decision to reduce the size of its business comes as Bombardier prepares for the long-term impact of the pandemic on the aviation industry, prompting the company to make significant workforce cuts. As it focuses on becoming a “pure play” business jetmaker, the sale of its rail business to Alstom will further reshape Bombardier’s operations and priorities. With concerns raised by employee unions regarding the recent layoffs, the company faces additional scrutiny over the decision to cut jobs amidst the government’s wage subsidy program.