Aerospace component manufacturer TransDigm Group (NYSE:TDG) on Thursday said it intends to cut its workforce by 15%, saying it is "beginning to see significant decreases in demand" and expects that trend to continue in the months to come.
TransDigm is a maker of a wide range of parts and components used in commercial platforms made by Boeing and Airbus, as well as in military applications. Commercial aerospace suppliers are expected to be particularly hard hit by the COVID-19 coronavirus pandemic, with airlines scrambling to cut costs by grounding aircraft and cutting back on capital expenditures.
Boeing has suspended its dividend due to the crisis, and on Thursday offered early retirement and buyout packages to employees as it tries to ready for what it sees as the "new reality" post-pandemic.
TransDigm said it is providing "a substantial lump sum" payment to all cut employees, based on their tenure, and all workers will also receive an additional $4,000 to defray expenses associated with healthcare costs and other needs. Senior management and board members are cutting cash compensation for the year, and TransDigm said it anticipates implementing one- to two-week furloughs at many locations over the next six months in response to unit-specific demand.
The company said it is following government guidance to mitigate spread of the virus, but said it is difficult to predict the duration or magnitude of disruptions. But management remains confident the business will return to normal eventually.
"TransDigm remains confident in its business model over the long term and hopes to return to normal employment levels as soon as practical," the company said.