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GE warns of more job cuts at aviation business amid sluggish recovery

Stock MarketsNov 24, 2020 11:12
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© Reuters. FILE PHOTO: The logo of U.S. conglomerate General Electric is seen on the company building in Belfort

By Rachit Vats and Rajesh Kumar Singh

(Reuters) - General Electric (NYSE:GE) Co on Tuesday warned of more job cuts at its aviation unit, citing a lengthy recovery for the airline industry from the impact of the coronavirus crisis.

The job cuts are the latest setback for the aviation sector, with the industry's woes expected to last into 2021 even as U.S. regulators ended a 20-month grounding of Boeing (NYSE:BA) Co's MAX 737 jets and COVID-19 vaccine developers reported positive data.

"As we continue to closely monitor market conditions, we are examining a range of options to appropriately scale our business to match the realities of the global airline industry recovery from the severe impacts of COVID-19," the company said in a statement.

In an internal video message delivered on Friday, GE's aviation unit head John Slattery said additional job cuts would be a component of those options, a company official said.

The company's shares were up about 5% at $10.58.

The Boston-based conglomerate in May announced plans to cut the global workforce at its aviation unit by as much as 25% in 2020, or up to 13,000 jobs, citing prolonged aircraft reduction schedules caused by the pandemic.

Through the quarter to end-September, GE had reduced about 20% of its aviation workforce and realized close to $1 billion in cost savings.

Last month, the company said it was "actively monitoring" the pace of demand recovery to ensure the business was "appropriately sized" for the future.

Revenue at GE's aviation unit, its largest, fell 39% in the third quarter while aviation orders more than halved during the period, with a 60% decline in both commercial engines and commercial services.

This has compounded the troubles at GE's aviation unit, which makes engines for Boeing and Airbus SE and had already been reeling from the grounding of Boeing's 737 MAX planes.

The Wall Street Journal first reported the development.

GE warns of more job cuts at aviation business amid sluggish recovery
 

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