Embraer to cut 900 jobs in response to Covid-19

Embraer has reduced its workforce by 4.5%, which corresponds to about 900 employees in Brazil, due to the impacts caused by the Covid-19 pandemic on the global economy and the cancellation of a partnership with Boeing. The South American OEM said the objective is to ensure Embraer’s sustainability and engineering capacity in the future.

The pandemic particularly affected Embraer’s commercial segment, which experienced a 75% reduction in aircraft deliveries during the first half of 2020 compared with the same period last year.

The company said its position worsened as a result of “the duplication of structures associated with the carve out of the company’s commercial business in preparation for a partnership which was terminated at the initiative of Boeing”. Also, the air transport sector will not recover in the short- or medium-term, according to Embraer.

Since the beginning of the pandemic, Embraer has initiated a variety of measures to preserve jobs, including collective holidays, reduced working hours, furloughs and paid leave. The manufacturer also introduced three voluntary dismissal plans (VDP), for which about 1,600 employees in Brazil chose to apply. . The company has also reduced face-to-face work at its industrial plants.

Despite cuts and pauses in production, in the second quarter of 2020, Bombardier, Embraer, Gulfstream and Textron delivered 88 jets. Overall, OEMs look set to deliver 30% fewer  jets and turboprops – around 560 aircraft compared with 809 last year.

Menawhile, Embraer released its mid-year financial results at the end of the second quarter. The OEM revealed an adjusted net loss of $198.8m in the first half of 2o20, however liquidity “remains solid”, as the company finished the quarter with $2bn cash. In the executive jets segment, Embraer delivered nine light and four large jets in the quarter whilst all announcing the delivery of its new Phenom 300E.