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Airbus examining restructuring including job cuts -sources

Published 05/13/2020, 12:49 PM
Updated 05/13/2020, 04:20 PM
© Reuters. The logo of Airbus is pictured at the entrance of the Airbus facility in Bouguenais
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By Tim Hepher and Julie Rimbert

PARIS/TOULOUSE, France (Reuters) - Airbus (PA:AIR) is exploring restructuring plans involving the possibility of "deep" job cuts as it braces for a prolonged coronavirus crisis after furloughing thousands of workers, industry sources said, though no decision is imminent.

Europe's largest aerospace group has not ruled out layoffs, while signalling that no decisions will be made before the summer.

But a global airline crisis has gathered speed in recent weeks, with carriers and suppliers pleading for help.

Chief Executive Guillaume Faury is expected to update managers on Thursday after warning staff last month that the firm's survival was at stake due to a slump in demand.

Under French law, Toulouse-based Airbus cannot disclose restructuring plans internally before consulting trade unions through a formal exercise not expected before the end of May.

But people close to the company said senior staff would be attempting to read between the lines of Faury's weekly internal briefing to gauge his job plans.

"Over the last few weeks, Airbus has implemented a number of financial, operational and social measures in order to adapt to the severe health and economic impact of the COVID-19 crisis," an Airbus spokesman said.

"The company will continue to take all necessary measures to ensure the future of Airbus in cooperation with its social partners."

A meeting with unions is scheduled for Thursday to discuss progress on furlough schemes, French union sources said. More temporary furloughs could be announced in the coming week.

One insider said any restructuring plan would involve forced redundancies and cutbacks were expected to be deep, though others cautioned it was too early to talk of specific numbers.

SENIOR JOBS

The company has also initiated an "executive population" review, reflecting Faury's resolve even before the crisis to arrest sharp growth in Airbus's senior ranks, sources said.

That stems in part from an in-house merger between Airbus and former parent EADS in 2014 that left an overhang of top jobs and a headquarters lifestyle that is being steadily wound down.

It has not said what sacrifices if any will be made by the company's board.

Reuters reported last month that Airbus could carry out a restructuring comparable to its 2007 Power8 shake-up which saw 10,000 job cuts split between permanent and temporary posts.

For now, Airbus is relying on government-backed furlough schemes in France, Germany and Britain to reduce staff costs after earlier asking employees to take 10 days' leave.

But it is also taking a deeper look at fixed costs after announcing plans to cut jet output by at least a third, with such costs harder to absorb when output is falling.

It also faces an ageing workforce with an estimated 37% of its 135,000 staff due to retire within a decade as a generation recruited to help launch its A320 jet approaches pension age - to be only partially replaced in a leaner, more digital age.

Research spending has been frozen across the board except for the in-demand A321XLR, a key product in its longer-term battle against rival Boeing (N:BA).

© Reuters. The logo of Airbus is pictured at the entrance of the Airbus facility in Bouguenais

Britain's Daily Telegraph reported earlier that Airbus could cut 10,000 jobs within days, based on a comparison with Boeing (N:BA) which is cutting 10% or about 16,000 of its workforce.

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