Embraer to reduce staff levels

In a reaction to the “unprecedented” crisis in the global economy and with 90% of its revenue coming from exports, Embraer, the world’s fourth-largest airplane manufacturer and market leader in mid-sized passenger jets, has announced the intention to lay off some of its workforce.
Both production and administration sides of the business will be affected as the company confirmed it wished to minimize job cuts in the engineering division in order to diminish the impact on the development of new products.
Embraer hopes to see staff reductions coming through voluntary layoffs as the company looks to reduce running costs by US$200 million in the face of a second-quarter loss of US$106 million. The Q2 figures for 2015 showed a profit of US$125.7. The loss has taken place after the company assumed a provisional worth of US$200 million during a period when a corruption investigation is ongoing.
In 2010, Embraer received a subpoena from the U.S. Securities and Exchange Commission and associated inquiries from the U.S. Justice Department regarding possible noncompliance with the U.S. Foreign Corrupt Practices Act relating to a number of aircraft sales outside of Brazil. Last month Embraer was quoted as saying that: “In 2016, the negotiations with the U.S. authorities for the settlement of the allegations of noncompliance with the FCPA have significantly progressed, to the point that Embraer recognized a $200 million loss contingency in the quarter ended June 30, 2016, reflecting the likely outcome of this matter.”
Two weeks ago the company lowered its estimates for revenues this year resulting from its view for the delivery of executive jets this year. Embraer anticipates delivery of its executive jets will reach 80 for light jets and 45 for large jets at year end, compared with up to 85 and 50 originally scheduled.
Embraer’s consolidated revenue for the year has been adjusted to reach up to $6.2 billion as opposed to the previously forecast US$6.4 billion.