American industrial conglomerate Textron has reportedly planned to lay off up to 1,950 employees, which represents 6% of its workforce.
The decision has been taken as the coronavirus (Covid-19) pandemic paralysed air travel demand, Reuters reported. It will affect the number of the company’s business units.
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In March, the company furloughed around 7,000 employees in the US due to the outbreak.
These developments are part of a restructuring plan to reduce the company’s operating expenses. It primarily impacts the TRU Simulation + Training business (TRU) within the Textron Systems segment, and the Textron Aviation and Industrial segments.
In addition to this, the company will suspend the production of flight simulators at its facility in Montreal, Canada.
In a SEC filing, the company said: “At TRU, there has been a substantial decline in demand and order cancellations for flight simulators in light of the expected long-term impact of the pandemic on the commercial air transportation business.
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By GlobalData“As a result, we will incur charges for severance, contract terminations, facility closures, asset impairments and an inventory valuation write-down, considering the current market conditions.
“TRU will continue to service and support its installed base of commercial air transport simulators and to manufacture flight simulators for other fixed-wing aircraft and rotorcraft at its Tampa, Florida, facility.”
The company expects the 2020 cash outflow to be in the range of $80m to $95m.
In January, Textron Aviation acquired Australian maintenance, repair and overhaul (MRO) service provider Premiair Aviation Maintenance for an undisclosed amount.
