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Airbus set to announce thousands of job cuts, unions say

Stock MarketsJun 30, 2020 06:15AM ET
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© Reuters. FILE PHOTO: The logo of Airbus is pictured at the entrance of the Airbus facility in Bouguenais

By Julie Rimbert and Johanna Decorse

TOULOUSE (Reuters) - Airbus is set to announce on Tuesday a restructuring involving thousands of job cuts as it deals with the fallout from impact of the coronavirus crisis, union officials said.

Airbus, which has said it will announce fresh action by the end of July after introducing temporary furloughs, declined to comment. Its shares rose 1%.

Reuters reported on Monday that the company's bigger-ever plan to shrink operations and staff was imminent.

Industry sources have predicted between 14,000 and 20,000 job cuts, though it remains unclear how much will be achieved through early retirements in Airbus's 135,000-strong workforce, heavily populated by veterans of its original A320 development.

Unions oppose the cuts.

"Airbus will announce measures that could have strong employment consequences," CGT union official Xavier Petrachi said, adding the union would oppose outright redundancies.

The health of the group is on the agenda for a European works council being held on Tuesday.

The company will brief unions on the status of orders and aircraft cancellations as it prepares to keep production lower than previously planned for up to five years.

Exceptional secrecy surrounds the politically sensitive restructuring affecting jobs in Britain, France, Germany and Spain, the company's key backers in a fierce contest with U.S. rival Boeing (NYSE:BA) for orders and industrial clout.

Airbus is expected to juggle its response to the industry's worst crisis with pressure to keep cuts to a minimum after France and Germany announced plans to support aerospace.

Michel Pierre, representing the CFDT union at Airbus, said Airbus had refused direct state intervention in its capital, upholding corporate governance reforms in 2013. Compulsory sackings would therefore be "totally unacceptable," he said.

Industry sources say Airbus is basing the restructuring on a 40% drop in underlying aircraft production for two years.

The company's programmes chief, meanwhile, said it was slowing a push into high-margin services as a result of a slump in air travel but maintaining its diversification strategy.

Some industry sources say Airbus has all but abandoned a goal of more than doubling services revenue to $10 billion this decade and transferred some staff to other roles.

Airbus set to announce thousands of job cuts, unions say
 

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