With no sign of the aviation sector reviving any time soon, General Electric Co is considering more layoffs in its aviation business. Earlier, the Company had slashed about 20% of its aviation business staff as part of cost-cutting measures and saved almost a billion dollars in costs.
The move is expected to help GE scale its business in line with the slump that the airline industry is going through, globally. The Company manufactures engines for Boeing and Airbus SE and was already in troubled waters when Boeing’s 737 MAX planes were grounded.
In May 2020, GE had revealed plans to reduce its global workforce in the aviation business by up to 25 per cent. Almost 13,000 jobs were at risk then due to flights being grounded and international borders being sealed during the pandemic.
Keeping in mind the slow recovery of the sector and the need to be lean and agile, downsizing seems to be the best solution. The revenue of the Company’s aviation business dipped 39 per cent in the third quarter. Aviation orders dropped by over 50 per cent during the pandemic with demand for both commercial engines and commercial services falling by over 60 per cent.
Employees have been warned of the development through an internal video message. The downsizing is likely to take place over a period of a year and a half.