Please ensure Javascript is enabled for purposes of website accessibility

GE's Aviation Business to Cut 25% of Workforce

By Howard Smith – May 4, 2020 at 10:55AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

GE begins to detail plans for cost savings amid COVID-19 pandemic impacts on its business.

In its first quarter earnings announcement last week, General Electric (GE -1.31%) said it was working on $2 billion of operational cost cuts, as well as $3 billion in cash preservation efforts, to help stem the impacts of the ongoing COVID-19 pandemic. Today, GE Aviation CEO David Joyce detailed some of those cost cutting plans. 

GE's aviation division is seeking a 25% cut in its global workforce this year. This includes some previously announced voluntary and involuntary actions and would bring the total reduction to approximately 13,000 employees, according to Bloomberg.

jet aircraft engines sitting covered in storage

Image source: Getty Images.

In his letter to GE Aviation employees, Joyce said that as the impacts from the pandemic continue, the company is able to more clearly identify changes in its business. "The deep contraction of commercial aviation is unprecedented, affecting every customer worldwide," he said. 

When GE reported first quarter earnings last week, it announced an 8% drop in year-over-year revenue. The company expects further declines as well, since the second quarter will be the first full earnings period experiencing pandemic impacts. GE Chairman and CEO Larry Culp specified the aviation business as the hardest hit, saying "the impact from COVID-19 materially challenged our first-quarter results, especially in Aviation, where we saw a dramatic decline in commercial aerospace as the virus spread globally in March."

Today's announcement said the reductions in GE Aviation will be permanent, as "part of a comprehensive strategy we are developing for resizing the business consistent with the forecast of our commercial market."

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

General Electric Company Stock Quote
General Electric Company
$61.91 (-1.31%) $0.82

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.