(Reuters) – General Electric Co’s <GE.N> aviation unit will cut its U.S. workforce by about 10%, Chief Executive Officer Larry Culp said in a letter to staff on Monday, as a shattered airline industry sought state support to survive the coronavirus crisis.
GE’s aviation unit, which makes engines for Boeing Co <BA.N> and Airbus SE <AIR.PA> aircraft, employed about 52,000 people globally as of 2019, with about half of them working in the United States.
Shares of the company fell as much as 3.9% to $6.25 in morning trading, slightly more than the latest round of broad falls on Wall Street in response to the crisis.
Global airlines are seeking tens of billions dollars in state bail-outs to absorb the shock from the coronavirus crisis, as they ground almost entire fleets and place thousands of workers on unpaid leave to stay afloat.
Delta Air Lines Inc <DAL.N> on Friday said its second-quarter revenue would fall by $10 billion, or 80%, as the virus all but halted global passenger travel.
“What we don’t know about the magnitude and duration of this pandemic still outweighs what we do know,” GE’s Culp said in a letter to employees on Monday, adding that he would forgo his salary for the rest of 2020. (https://reut.rs/3aetSlc)
His total compensation was $24.6 million in 2019.
The lack of aircraft maintenance activity will also affect about 50% of GE’s U.S. maintenance, repair and overhaul workforce for 90 days, Culp said.
The cost reductions will result in 2020 savings of between $500 million and $1 billion for GE, which has already placed a hiring freeze and canceled salaried merit increases for employees.
GE had about 205,000 employees in 2019.
(Reporting by Ankit Ajmera in Bengaluru; Editing by Anil D’Silva)