Embraer announced Thursday (3 September) that it was firing 900 workers, about 4.5 percent of its global workforce as it works to survive the COVID-19 pandemic that has virtually shut down international aviation and because of the cancellation of the company’s planned partnership with Boeing.
The company said the pandemic “particularly affected Embraer Commercial Aviation, which experienced a 75 percent reduction in aircraft deliveries during the first half of 2020 as compared to the same period last year. The situation worsened as a result of the duplication of structures associated with the carve out of the company’s commercial aviation business in preparation for the partnership which was terminated at the initiative of Boeing, as well as the expectation that the air transport sector will not recover in the short or medium-term”, the company said.
Since the beginning of the pandemic, Embraer said it has “adopted a series of measures to preserve jobs, including collective vacations, reduced working hours, furloughs, paid leave, and three voluntary dismissal plans (VDPs). The company has also reduced face-to-face work at its industrial plants with the aim of ensuring the health of employees and business continuity. Around 1,600 employees chose to participate in the VDPs in Brazil”.
Embraer reported second quarter losses of US$315 million on 5 August with the main reason attributed to the commercial aircraft division which saw a drop in sales due to the COVID-19 pandemic and the failed joint venture with Boeing. The losses were in addition to the US$292 million lost in the first quarter. This compares to the second quarter of 2019 when the company posted a profit of US$7.2 million. The company said in a statement released with the earnings that commercial fell saw revenue fall by 82.8 percent compared with the same period of last year and it said it delivered only four commercial airliners compared to 26 in the year ago period.
Embraer said due to uncertainty caused by the pandemic it will not be releasing future guidance and said it was “affected negatively” by the collapse of a deal under which Boeing was to have acquired 80 percent of Embraer’s commercial division for US$4.2 billion. The company also said that because of the state of the industry, it would reschedule the start of operations of its newest E175-E2 jet until 2023. “The company believes that the E175-E2 will still be available with more than adequate time to enter into service in the commercial aviation market to meet market demand for the jet”, Embraer said.
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