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Airbus CEO Guillaume Faury has disclosed that the company may pursue job cuts. AIR stock is down today, trading at around 63 EUR.
Netherlands -ased aircraft manufacturer Airbus SE (EPA: AIR) has lost about 2% of its stock value as the company reiterated through its Chief Executive Officer Guillaume Faury that the company cannot ascertain there would not be compulsory lay-offs as it fights to cut costs following the recovery from the first wave of the coronavirus pandemic.
As reported by Reuters, Faury made this known while speaking to French radio station RTL on Tuesday. According to the report, the company will do its best to cut costs without resorting to compulsory redundancies, but it cannot guarantee that they would not happen. Airbus alongside other companies in the aviation industries has lost a tremendous amount of stock value and revenue since the COVID-19 pandemic hit. While the majority of the companies took palliatives from the government to cushion the effect of the pandemic, almost all had to resort to cost-cutting strategies which largely involves laying workers off.
As Faury noted, the company may downsize its workforce by shedding about 15,000 of its workers worldwide. “The crisis is existential. Our life as a business is potentially at risk if we don’t take the right measures. We are taking them,” Faury said. He added:
“The situation is so serious, and we are faced with so much uncertainty, that I think no one can guarantee there won’t be compulsory redundancies if we’re to adapt to the situation, especially if it evolves further.”
The evolution of the pandemic into what many fear will be a second wave is already imminent as new COVID-19 cases particularly in the European Economic Area (EEA) has sparked notable unrest. While most firms are still recuperating from the losses the first wave of the pandemic stirred, newer measures already being imposed by countries like France, Spain, and Greece, of which other nations may follow will further put a strain on businesses.
“There are lots of measures we can take between voluntary redundancies and compulsory redundancies,” Faury added stating that Airbus will do all it possibly can to work hard to prevent the situation from becoming so dire that compulsory redundancies will be the only option.
Airbus Stock Shows Similar Pattern across Industry Players
As Airbus stock took the slight dive on Monday, other industry players have seen a dip to their stock prices or at best, slight additions. France based airline manufacturer Dassault Aviation (EPA: AM) is trading with a loss of about 0.14% while Boeing Co (NYSE: BA) added a slight 0.21%.
A major pattern that is however peculiar to these industry players is the job losses spiked by reduced earnings. Back in May, CBS reported that Boeing (BA) intends to lay off as much as 12,000 staffers as the pandemic rages. A new wave of the pandemic will only lend credence to the plight of these multinationals to add to the number of job seekers.