GE Aviation announced Monday that it is expanding the scope of its job cuts in response to the impacts the COVID-19 crisis has had on the business.
GE Aviation leaders are developing a plan to permanently reduce the firm's global workforce, which is a total of about 52,000 workers, by as much as 25%. The announcement was made by David Joyce, president and CEO of GE Aviation, in a letter to employees Monday.
GE Aviation, which has a manufacturing site in Wilmington, announced March 23 that it would reduce 10% of its total U.S. workforce
. The new announcement includes the previous action, officials said.
GE Aviation officials would not share specific layoff numbers for its Wilmington site or others.
In an email, Monday, a GE Aviation spokesperson reported the Wilmington site's current workforce at about 650.
The business unit of General Electric (GE) reported about 650 GE Aviation employees at the Wilmington site late last year. The local site, located in Castle Hayne, makes rotating parts for the firm’s legacy engines and new commercial engines.
"As this pandemic continues to advance, our understanding of its impact on our industry and our business has also evolved. The deep contraction of commercial aviation is unprecedented, affecting every customer worldwide.
"Global traffic is expected to be down approximately 80% in the second quarter when compared to the start of the pandemic’s effect in China in early February. Our aircraft manufacturers have announced reduced production schedules that will extend into 2021 and beyond reacting to the projected prolonged recovery," Joyce said.
"To protect our business, we have responded with difficult cost-cutting actions over the last two months. Unfortunately, more is required as we scale the business to the realities of our commercial market," he added.
In a corporate earnings call last week, GE officials said the Aviation unit was challenged in the first quarter.
“The impact from COVID-19 materially challenged our first-quarter results, especially in Aviation, where we saw a dramatic decline in commercial aerospace as the virus spread globally in March," said GE Chairman and CEO H. Lawrence Culp, in a news release last week.
"We are targeting more than $2 billion in operational cost out and $3 billion of cash preservation to mitigate the financial impact, and we executed a series of actions to de-risk and de-lever our balance sheet amid a challenging environment," Culp said. "While there are many unknowns, there will be another side—planes will fly again, healthcare will normalize and modernize, and the world still needs more efficient, resilient energy."
"We're embracing today's reality and accelerating our multi-year transformation to make GE a stronger, nimbler, and more valuable company."
Correction: This story has been updated to reflect the announcement by GE Aviation on Monday.