Textron Aviation is continuing to lay off workers with another round of notices issued late last week. The move, part of a larger Textron cost-cutting initiative, follows similar steps taken by several other business jet manufacturers.
The number of Textron Aviation employees affected in the latest round was not specified, but Textron Aviation communications director Rosa Lee Argotsinger said the notices “are in line with actions previously announced by Textron.”
Textron in late August had announced a restructuring plan that was to continue through first-quarter 2017, but the majority of that was to affect other areas of the company. Last week’s notices were part of a series of actions that Textron Aviation has taken this fall, including offering a voluntary separation program in September and announcing it was closing two of its maintenance centers. That was followed with a round of layoff notices.
“We are taking action to streamline our business through workforce reductions to improve our overall operating efficiency,” Argotsinger said. “Our focus remains on bringing products and services to market that help our customers achieve success.”
Textron Aviation is among a number of the business aircraft manufacturers that have announced layoffs or voluntary retirement plans in recent months. This past summer, Bombardier issued some layoff notices and shifted some of its workers in Wichita as Learjet sales have slowed. The Canadian company more recently announced plans to lay off 7,500 workers company-wide with about one-third coming from its aerospace division. Bombardier earlier in the year had announced an overarching cost-cutting plan to improve its cash position and optimize its operations. President and CEO Alain Bellemare last week updated analysts on its progress, saying, “We are more than 80-percent complete with the first major workforce reduction.”
Embraer this fall confirmed that it is cutting 1,463 employees, or about 8 percent of its workforce, through a voluntary buyout program that the Brazilian manufacturer announced this past summer. That came on the heels of a $200 million charge the company took as part of its corruption investigation, but also as it lowered its business jet delivery forecast and reported a 25-percent drop in revenues from its executive jets unit.
Gulfstream, which last year laid off about 600 contractors and 3 percent of its employees, in June offered voluntary separation agreements. That offer ended in August. Gulfstream is not disclosing the number of workers who accepted the offer.
The layoffs are occurring as business jet deliveries have dropped by 7.7 percent this year. This has been a driver behind the 14.4 percent drop in billings for fixed-wing general aviation aircraft.
“There’s no way to sugarcoat the fact that these numbers are not what we had wanted to see,” GAMA president and CEO Pete Bunce said in announcing the numbers. Bunce, reflecting on the layoffs earlier this fall, pointed to weakness of developing markets and an overall overcapacity in the global business and general aviation marketplace. “We’ve got too many airplanes out there chasing too few customers, which is driving residual values down,” he noted.
Textron Aviation’s business jet shipments, however, have been stronger this year, up 14 units through the first three quarters. Its revenues are up by nearly $150 million, as well. But the unit’s profits are down, a factor the company is attributing to two factors: operating costs associated with higher volume; and mix of deliveries. Textron this summer had pointed to softer pricing of the Latitude, but expected that to strengthen in the latter part of this year.