January 21, 2014
Bombardier Aerospace is to lay off 1,700 employees in a bid to contain costs after stretching out CSeries development by at least 12 months and seeing business and commercial aircraft orders decline in 2013.
Announced today in an internal memo to employees, the layoffs will be split between 1,100 in Canada and 600 in the U.S. Plants in Northern Ireland and Mexico are unaffected, the company says.
Bombardier Aerospace currently has 38,350 employees worldwide and says the final layoff figure may be lower as it has 300 open positions, some of which could be filled by affected employees.
The Canadian manufacturer last made major layoffs in 2007, at the bottom of a financial downturn that saw the company abandon almost all new-product development in a bid to stay solvent. A year later, Bombardier launched development of the CSeries airliner and began hiring again.
The company says it has been making efforts to contain costs for the past year to 18 months in the face of massive development expenditures for the all-new CSeries airliner and Learjet 85 and Global 7000/8000 business jets, as well as the upgraded Learjet 70/75 and Challenger 350.
“After a series of different initiatives to reduce cost unfortunately we have had to make layoffs,” says a spokesperson, adding “These cuts are specifically targeted at cost containment.”
Bombardier is not blaming the CSeries delay, which has pushed entry into service to first half 2015 from mid-2014, for the layoffs. “A number of factors contribute to our cash flow,” she says.
The company delivered 238 business and commercial aircraft in 2013, five more than the previous year but 10 fewer than forecast because to delayed certification of the Learjet 70/75.
At 388 aircraft, total orders net of cancellations for 2013 were down from 481 a year earlier. Net orders for business jets slid to 305 from 343, and to 81 from 138 for commercial aircraft including CSeries.