This story is part of AIN's continuing coverage of the impact of the coronavirus on aviation.
Further voluntary and involuntary layoffs at GE Aviation will see its 52,000-strong global workforce shrink 25 percent as the company institutes plans over the “coming months” to shave its cost base by $1 billion this year, company CEO David Joyce wrote in a letter to employees dated May 4. The plans, said Joyce, include $2 billion in “cash actions” in 2020 and follow a “comprehensive strategy” under development to re-size the business to match its forecast for the commercial aviation market.
The decision follows an announcement on March 23 to slash the company’s U.S. workforce by 10 percent. At the time the company also instituted temporary layoffs affecting 50 percent of its U.S. maintenance, repair, and overhaul employees for 90 days. The company estimated the move—along with a hiring freeze, the cancellation of the salaried merit increases, a “dramatic” reduction of all non-essential spending, and a significant decrease in its contingent workforce—would save it between $500 million and $1 billion. Since March 23, however, market “realities” have dimmed, as aircraft manufacturers plan reduced production schedules well into 2021. GE expects global traffic to decline by 80 percent during the second quarter compared with the start of the pandemic’s effect on China in early February.
“While extremely difficult, I am confident this is the required response to the continued contraction of the industry and its protracted recovery,” said Joyce, who on March 23 said he would forego a salary of his own this year. “I am equally confident that the industry will recover over time and that we will be positioned to win.
“Thank you for your resolve and determination during these trying times. And most importantly, thank you for supporting one another. Please know we are using the best possible resources to understand this pandemic and its impact on our business while plotting our path forward protecting our people, our customers, and our business. We are one team and together we will come out of this with a strong affirmation of our purpose and a spirit to succeed.”