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Bloomberg
Canada’s plane and train maker Bombardier said it was cutting 7,500 jobs, its second major layoff announcement this year following delays in deliveries of its C-series airplanes.
The job cuts, to be completed by the end of 2018, are expected to mostly hit administrative posts, with two-thirds from the transport division, a Bombardier spokesman said.
These layoffs come on the heels of a February announcement to eliminate 7,000 manufacturing jobs. The two rounds of job cuts account for about 20 percent of Montreal-based Bombardier’s workforce.
Bombardier, which has taken on debt to finance its ambitious plane-building program, said the latest downsizing will result in annual savings of about $300 million as part of a five-year plan to turn the firm around.
“The actions announced today will ensure we have the right cost structure, workforce and organization to compete and win in the future,” said chief executive Alain Bellemare in a statement. Bombardier has been trying to accelerate production of the C Series, as well as to develop the new Global 7000 business jet, scheduled to begin production in 2018.
The company announced plans to hire as many as 3,750 employees to speed these initiatives, according to Canadian media reports. Bellemare said the new jobs would be added in low-cost countries and more-established higher cost operations.
“It’s the only way that we can protect the thousands of jobs in the industry and at Bombardier. It’s a very competitive industry and it’s important to take the necessary steps to remain competitive in this context,” he was quoted as saying
Bombardier had touted the C Series, its first completely new aircraft in the 100- to 150-seat category in more than 25 years, as a means to cut into the dominance of US aerospace giant Boeingand European rival Airbus.
But the project has been stymied by delays, with Bombardier announcing in September that it cut its 2016 forecast for deliveries of the plane from 15 to seven due to
engine delivery delays from Pratt & Whitney.
Costs for the C Series program have risen to $5.4 billion, Bombardier has estimated.
The government of Quebec came to the rescue of Bombardier last year, investing $1.0 billion for a 49.5 percent stake in its C Series plane
program.
Bombardier has also sought support from federal officials in Canada, but no deal has been reached.
The Canadian government remains interested in supporting the company if certain conditions are met, such as keeping the headquarters and other key operations in Montreal and a large presence in Canada.