05 May 2020
Posted in Aerospace, Defense & Security
General Electric Aviation to cut 25% of its workforce to prepare for post-COVID-19 aviation market, says GlobalData
Following the announcement by General Electric Aviation’s Chief Executive David Joyce on the company’s upcoming staff reductions;
Vera Lin, Aerospace and Defense Analyst at GlobalData, a leading data and analytics company, offers her view on the company’s decision:
“General Electric Aviation’s scaling down of its workforce by up to 25% follows a string of announcements for workforce reductions and slowed production rates across the commercial aerospace market. Boeing and Airbus announced a 50% and 35% decrease in production, respectively, citing reduced demand. The economic pressure of COVID-19 is expected to prolong the market recovery period as businesses develop long-term strategies to adapt to the continued contraction of the commercial aerospace industry.
“The spread of COVID-19 has plunged global demand for air travel by as much as 95% in the US. Global traffic is anticipated to decrease by approximately 80% in Q2 and commercial aerospace companies are introducing business downsizing measures to mitigate the effects of a potential recovery period of three to five years.
“General Electric’s Aviation orders decreased by 14% year-on-year in Q1 2020 from US$8.7bn in 2019 to US$7.4bn in 2020, along with a 13% decrease in revenues from US$7.9bn to US$6.9bn. The economic effects of COVID-19 will require cost-cutting measures in resizing the business according to the forecasted contraction of the commercial aerospace market.”