GE Aviation plans to cut 25 pct of workforce amid pandemic

Source: Xinhua | 2020-05-06

General Electric (GE) said on Monday that it was planning to cut the global workforce of its aviation unit this year by as much as 25 percent, or around 13,000 jobs, citing "deep contraction" of commercial aviation industry amid the COVID-19 pandemic.

"To protect our business, we have responded with difficult cost-cutting actions over the last two months. Unfortunately, more is required as we scale the business to the realities of our commercial market," GE Aviation CEO David Joyce said in a message to employees.

Joyce noted that global traffic is expected to be down about 80 percent in the second quarter compared with early February and aircraft manufacturers have cut production extending into 2021 and beyond.

"We are developing our plan for permanent reductions to our global employee base that we anticipate will bring our total reductions this year to as much as 25 percent," he said, noting it is part of a plan to reduce 1 billion U.S. dollars in costs from the business.

"While extremely difficult, I am confident this is the required response to the continued contraction of the industry, and its protracted recovery," he said.

The move came after GE announced in March that its aviation unit was planning to reduce approximately 10 percent of its total U.S. workforce.

Billionaire investor Warren Buffett, who serves as Berkshire Hathaway chairman, said Saturday that his conglomerate has sold all its airline stocks, sending an alarming signal to U.S. airline industry devastated by the COVID-19 outbreak.

"The world has changed for the airlines," said Buffett in Omaha, Nebraska, at Berkshire Hathaway's annual shareholder meeting over the weekend, which was held virtually this year.

"And I don't know how it's changed and I hope it corrects itself in a reasonably prompt way," he said.