What's going on?
French-headquartered aircraft manufacturer Airbus announced on Wednesday it was scrapping 15,000 jobs as it tries to pick up the post-coronavirus pieces.
What does this mean?
Airbus is cutting 11% of its staff as part of a broader restructuring – the biggest in its history. And since the aircraft maker doesn’t expect air traffic to return to pre-pandemic levels until 2023, it reckons it’ll be forced to make further cuts as soon as next year if forecasts get any bleaker.
Airbus’s motivations are pretty clear-cut: airlines don’t need as many planes as they thought they would at the beginning of the year, which means less revenue for manufacturers. But as a way of balancing out its costs and avoiding political conflict, Airbus has at least spread the job cuts across the globe – from its French home to its German industrial base, as well as in other hubs like Spain and the UK.
Why should I care?
The bigger picture: No-fly zone.
America’s Boeing hasn’t had it much easier: Airbus’s arch-nemesis announced 16,000 job cuts back in April, and it’s since lost orders on over 100 planes after Norwegian Air and Singapore’s BOC Aviation canceled their purchases last month. The US giant would’ve needed to get its planes off the ground first, mind you: news broke on Wednesday that Boeing hid data linked to the crashes of its 737 MAX 8 jets from the authorities, which could impede the test flights that’ll help get the plane recertified.
Zooming out: Slasher movie.
A challenge for sprawling global businesses like Airbus and Boeing is deciding exactly which jobs to cut, especially now several countries have government support in place precisely to encourage companies not to fire staff. That support’s arguably most generous in the UK, but that hasn’t stopped some of the country’s biggest retail and aviation firms slashing 11,000 jobs in just two days.