GE Aviation prepares to lay off tenth of U.S. workforce

Furloughs will also take place as industry hopes for $75 billion bailout.

General Electric’s aviation wing will cut 10% of its domestic workforce in the coming months because of the novel conoravirus.

In a letter to employees Monday, G.E. Chairman and Chief Executive Lawrence Culp Jr. announced that he and David Joyce, the company’s vice chairman and head of its aviation unit, will forgo their salaries for the rest of 2020. He also said the company had instituted a hiring freeze, canceled scheduled merit raises and will furlough half of the company’s maintenance, repair and engine overhaul workers for 90 days.

The layoffs, which will affect 2,600 hourly and salaried workers, and other moves will save the company $500 million and $1 billion, Culp wrote.

“With regard to our financial position, our company is sound,” he wrote. “However, what we don’t know about the magnitude and duration of this pandemic still outweighs what we do know.”

GE Aviation employs around 52,000 workers worldwide, half of whom are in the United States. The company is also discussing further reductions among international employees.

Culp wrote that other divisions of the company were scaling up to manufacture more CT and ultrasound devices, mobile X-ray systems, ventilators and patient monitors to meet the demand of health care workers.

GE Aviation makes aircraft engines, including the machines that power Boeing’s 777s and 787 Dreamliners. The company said 33,000 of its engines are in service.

But the air travel industry has been one of the hardest hit by the near social shutdown caused by the fast-spreading COVID-19 disease. Airports in recent weeks have transformed into virtual ghost towns. Major air carriers have announced major cuts in flight offerings. Regional airline are in deep distress, and even the private jet industry has asked for government assistance.

The aviation industry is hoping for a rescue package worth more than $50 billion from Congress, plus another $25 billion in loans and tax relief.