A year after announcing its 5-year turnaround plan to try and make the plane and train manufacturer a profitable business, the Canadian company Bombardier has announced the intention to cut just over 10% of its 7,090 workforce. The company has indicated that much of the manpower restructuring will be centered around streamlining administrative and non-production elements, while creating new centers of excellence for design, engineering and manufacturing activities.
According to Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. “After successfully de-risking our business last year, our focus has shifted to building a clear path to profitable earnings growth and cash generation. The actions announced today will ensure we have the right cost structure, workforce and organization to compete and win in the future. We are confident in our strategy, our leadership team and our ability to achieve both our 2016 goals and our 2020 turn-around plan objectives.”
As Bombardier has a presence in many countries, the job cuts will not be restricted to Canada, where 2,000 jobs will go. The major hit is going to be felt at its rail unit which will have to absorb over two-thirds of the lay-offs. These cuts come subsequent to the 2,700 jobs which were cut from the corporate jet unit in 2015.
The company anticipates making recurring savings of about $300-million a year by the end of 2018 through current objectives. It anticipates recording a charge of between $225-million and $275-million starting in the fourth quarter of 2016 and continuing into 2017.
There is some good news on the aviation front though as a number of the job cuts are expected to be partially offset as Bombardier looks to take on new employees for major growth programs like its Global 7000 business jet.
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