(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.
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. (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