Aviation news analysis
50 SKY SHADES - World aviation news

Business jet sales slump forces Embraer to cut workforce

Download: Printable PDF Date: 02 Oct 2016 15:08 category:
Publisher:
Business jet sales slump forces Embraer to cut workforce - Manufacturer publisher
Tatjana Obrazcova
Country: Brazil Aircraft: Airplanes
Source: Reuters

The Brazilian plane maker Embraer will cut nearly 8 per cent of its workforce through a voluntary buyout programme, slashing costs amid weak business jet sales and downsized defence contracts.

Embraer accepted the resignation of 1,463 employees, effective this week, out of 1,470 who volunteered for the buyouts, according to the company.

Union leaders said last week that nearly half of the workers leaving are metalworkers on Embraer’s assembly lines in Sao Jose dos Campos, about 100km outside Sao Paulo.

The job cuts, along with leaves of absence starting next month, will help to bring down labour costs that rose along with double-digit inflation in Brazil last year, hurting profitability as demand flagged in two of Embraer’s three main segments.

Embraer’s defence unit, its fastest-growing division just a few years ago, has been forced to scale back major programmes as a federal budget crisis hit military spending. The plane maker also cut its target for executive jet sales this year on weak demand.

The layoffs at Embraer, coupled with deep job cuts by car makers and other manufacturers, underscore how unemployment in Brazil is still climbing two years into a severe downturn, sapping the strength of an expected recovery.

Embraer shares fell 3 per cent in midday trading in Sao Paulo, contributing to a 1 per cent drop for the benchmark Bovespa stock index.

Embraer is designated a strategic defence business by the Brazilian government, which holds a so-called golden share that gives it a veto over strategic decisions such as "the creation and/or alteration of military programmes", according to the company.



Loading comments for Business jet sales slump forces Embraer to cut workforce...


Recommended

Cathay Pacific becomes second operator of the A350-1000 widebody

Increased capacity and highest levels of comfort for the airline’s longest flights Cathay Pacific Airways has become the second airline to operate the A350-1000, the world’s newest long...

AIR Convention bringing aviation industry giants to the Center of Europe

When looking to discover new ideas, networking or just landing a big business deal, industry conferences seem like the best bet, especially in aviation, where most deals are done face-to-face. That&rs...

Boeing Delivers First 737 MAX to Jet Airways

Boeing and Jet Airways celebrated the delivery of the airline's first 737 MAX airplane. Jet Airways will be first Indian carrier to fly the new and improved 737 airplane, which delivers a double-d...

Airbus A330neo en route to function & reliability tests

Flying over European Airbus sites and visiting 15 cities worldwide to test aircraft readiness for airline operations The A330neo, Airbus’ newest widebody aircraft, has embarked on a worldwide...