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Bombardier to Cut 7,500 Jobs

This is on top of 7,000 positions the company already planned to eliminate by the end of 2017.

A Bombardier CRJ after takeoff.
A Bombardier CRJ after takeoff.

MONTREAL (AP) — Airplane and train maker Bombardier will cut 7,500 jobs around the world over the next two years as it tries to turn around its business.

The Montreal-based company said Friday that the reductions are designed to save about US$300 million a year, part of a plan to restore it to profitability by 2020.

Its plans to eliminate 7,500 positions — more than 10 percent of its global workforce — through the end of 2018, are on top of 7,000 positions Bombardier already planned to eliminate by the end of 2017.

About 2,000 positions will be cut across Canada, the aerospace giant said Friday. Two-thirds of the job losses throughout Bombardier will come from its transportation division, with the rest from its aerospace operations.

The company said the job losses will be partially offset by more than 3,700 strategic hirings as Bombardier ramps up production of its CSeries commercial jet and new Global 7000 business aircraft, along with rail contracts.

The manufacturer has been struggling because of heavy spending on new aircraft, a slowdown in business jet demand and production challenges for its railway products.

"I know these aren't easy decisions in the short-term," CEO Alain Bellemare said. "But they are the right decisions to ensure the future of the company."

In February, Bombardier announced plans to cut 7,000 positions by the end of next year as it struggled to sell its signature CSeries passenger jet in the face of competition from global rivals.

Bellemare said the latest measure will enable Bombardier to continue investing in its operations and secure more rail and plane work. He said the new jobs will be created in countries where labor costs are cheaper but also within Bombardier's existing network of global operations.

"It's the only way that we can protect the thousands of jobs in the industry and at Bombardier," he said. "It's a very competitive industry and it's important to take the necessary steps to remain competitive in this context."

Bombardier said it expects to record between US$225 million and US$275 million in restructuring charges through the end of next year, starting in the fourth quarter.

The announcement comes after Bombardier asked Canada's federal government for a US$1-billion investment nearly a year ago.

Canada's Innovation Minister Navdeep Bains said the question of federal assistance was not a matter of if, but how it would be given. He said Ottawa wants Bombardier to keep its head office and jobs connected to its research and development activities in Canada.

On its website, Bombardier said it has 31,200 employees in aerospace and 39,400 in transportation globally.

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