Canadian airplane and train maker, Bombardier, announced today that it is to cut its workforce by 1,700 in the US and Canada, mainly in the Montreal area.
The company says this is part of its cost-cutting drive that started nearly two years ago.
The company has not given a financial cost-cutting target linked to redundancies. The measure affects both permanent, contract, union and non-union employees
Bombardier Inc. announced last week that it was postponing the launch of its CSeries, a $3.9 billion investment.
Three hundred of the total 1,700 layoffs already occurred in December. The company added that it has a few hundred job vacancies that it is attempting to fill and will try to match as many workers who are being cut with the new positions.
The layoffs will occur in several parts of the company, including support, sales, engineering and manufacturing. Bombardier employs 38,350 people worldwide, 22,200 of them in Canada.
Haley Dunne, a Bombardier spokesperson, said:
“This is all with the goal of assuring our long-term success,” Dunne told Reuters. “It’s just part of the overall continued focus we’re putting on managing our costs prudently so that we can support our investments.”
19% fewer orders in 2013
Unlike Boeing or Airbus, which have orders guaranteeing work for decades to come, Bombardier is still feeling the effects of a sluggish global economy. The company delivered 238 airplanes in 2013, a drop of 19% compared to 2012, and short of its target.
Bombardier also received 388 orders for aircraft net of cancellations in 2013, compared 481 in 2012.
Guy Hachey, President and Chief Operating Officer, Bombardier Aerospace, said:
“The global economy has remained persistently sluggish, and with its recovery taking longer than originally anticipated, 2013 continued to be a challenging year for aviation. Despite this difficult environment, we put in a solid performance overall.”
“We had a successful order intake that included firm orders from a broad base of customers located in both traditional and emerging markets. A few of these included Flexjet LLC, VistaJet, American Airlines, the Ilyushin Finance Co. (IFC) of Russia and Iraqi Airways.”
Bombardier to focus on emerging economies
Hachey added that the company’s strategy of geographic diversification in certain targeted countries continued to gain impetus last year. The aim is to expand their products’ presence in emerging markets that yield results, including China, Asia-Pacific, Russia and Africa.
Mr. Hachey added “We are encouraged by the volume of orders for both business and commercial aircraft, and the resulting strong order backlog. As well, we achieved a significant milestone with the sale of one of our Bombardier 415 amphibious aircraft to a customer in the U.S.”
Below are some highlighted data released by Bombardier Inc:
- 180 business jets were delivered in 2013 compared to 179 in 2012.
- 305 net order for business jets were received in 2013 compared to 343 in 2012.
- 55 commercial aircraft were delivered in 2013 compared to 50 in 2012.
- 81 net orders for commercial aircraft were received in 2013 compared to 138 in 2012.