Global company Airbus had announced that it would be cutting 15,000 jobs across its entire commercial aircraft division, marking the company's most extensive restructuring in its history.
The decision was made after expectations of massive repercussions from the coronavirus pandemic's economic impacts on the aviation sector, as reported by the Wall Street Journal.
Massive job cuts
Most of the job cuts amount to approximately 11% of the aviation company's entire workforce based mostly in France and Germany, which are Airbus's major manufacturing sites.
The decision came several months after grounded air traffic due to lockdown restrictions and travel bans that led to multiple airline bankruptcies and restructuring around the globe, including plans to decrease the fleet size and break off deals for new aircraft.
Air traffic is expected to recover its pre-pandemic economy slowly until at least 2023 and at the most, 2025, said Airbus.
Guillaume Faury, AIrbus's Chief Executive, said the company is currently experiencing its most significant economic crisis the industry has ever had. Faury also noted they need to make sure that they can maintain their enterprise and come back from the global pandemic healthy and stronger than ever.
Airbus's move comes after its rival company, Boeing Co., outlines its plans to reduce its workforce by at least 10%.
The rival company, Boeing, struggled with the yearlong grounding of its iconic 737 Max plane in February as Airbus encountered a backlog of orders of its A320 jet meant to rival the 737 Max.
Coronavirus on aviation
According to The New York Times, Airbus's financial condition stumbled along with the rest of the aviation industry amid the devastating impacts of the coronavirus pandemic. Airline companies are now setting their course for the future with plans to reduce passengers' demand, which results in less need for more aircraft.
At the end of the week, more details regarding the job losses and how they will be broken down will be revealed by the company after talks with unions commence.
However, the Unite union revealed it expects a total of 1,116 manufacturing jobs and at least 611 office-based jobs to be let go, cutting down the workforce of Airbus in the UK by 15%, as reported by BBC.
The COVID-19 crisis led to the aviation industry's inevitable changes, with only the severity being questioned. Catastrophic effects were seen in April, where global air traffic dropped by at least 90% of its usual numbers.
When aircraft are grounded, they earn no revenue but are still required to be maintained per regulations, as well as their lease or loans needed to be paid in full. This results in airlines losing money and earning none, causing them to decide to halt getting new planes as older ones are not utilized to their fullest.
While Airbus made full use of the government's support and delayed the job cuts, the coronavirus's extended presence and its economic effects left the aviation company little choice in the matter.
The company expects to begin letting jobs go starting in summer 2021 but hopes that most of the cuts will consist of voluntary separation or early retirement. Airbus previously announced it was "bleeding cash at an unprecedented speed" with the coronavirus's effects on the economy.
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