Downsizing in Global Corporations Continues as Airbus Cuts 15,000 Jobs Globally


One of the worst-hit sectors due to the COVID-19 pandemic is the aerospace industry. It is believed that the industry will take years to recover from the tremendous loss of revenue. In line with its efforts to sustain business, Airbus has now announced that it will cut 15,000 jobs globally. These job cuts are approximately assessedOpens a new window to be 5,000 in France, 5,100 in Germany, 900 in Spain, 1,700 in the U.K. and 1,300 elsewhere. Airbus is the biggest aerospace company in Europe, and this announcement can have severe repercussions to the ballooning unemployment rate and economic recession.

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Airbus has had to reduce its production levels due to the global lockdown that hit the travel sector resulting from the coronavirus pandemic. However, there are questions related to these job cuts since the unions are yet to agree to them. Airbus is also expected to have 37% of its current staff retiring this decade. Hence, there is a lack of complete clarity on the announcements of these cuts.

Several other aerospace companies are also targeting several job cuts in the next two years. It is evident that the majority of the jobs are in the production lines. To facilitate the smooth reduction of the workforce, Airbus is emphasizing on voluntary early retirement such that mandatory cuts are the last step. In April this year, Airbus announced a furlough of 3,200 of its employees.
These measures provide a clear picture of the gravity of the situation. It is critical to, therefore, understand what measures – especially from a people technology perspective – can help mitigate this job loss. At this stage, Airbus has not announced the next steps for the staff that is being laid off. Since cost optimization is a challenge, Airbus must evaluate other options.

1. Re-skilling employees who can be shifted to other roles when their current roles become redundant: The company could take this approach by ensuring that it has the right learning and developmentOpens a new window technology to train employees for a different business reality and future within the company. Large organizations like AT&T have identified jobs that were going to become redundant and retrained those employees using technology to prevent loss of talent as well as knowledge.

2. Using people practices such as furloughs: This could be a better option since recessionary cycles have a lifespan. In the long term, the right talent is difficult to come by. Market uncertainties may determine short-term changes like layoffs, but adapting to the new world order and technologies to ensure talent management has long-term value.

3. Assessing and onboarding vendors who can provide great quality outplacement services: For example, Insperity has introduced fee-inclusive programs for their recruitment and outplacement servicesOpens a new window . Exploring alternatives like these where technology can be used to map redundant employees to roles outside the current organizations can be a win-win for both. Similarly, CareerArc, which is a social recruiting and outplacementOpens a new window platform, has recently introduced its video-based AI feature within its outplacement network. Organizations that plan to downsize can evaluate these alternatives and engage in creating a seamless process of transitioning out employees.

It is evident and expected that there will be several job cuts announced by more companies in the months to come. But engaging with employees in a way where they can be part of the solution ensures that the company can rehire great talent in the future.

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Employees feel that they are being trusted when they get an opportunity to share their ideas on how cost reduction can take place. However, to do that, leaders have to be aware of the positive and possible negative impacts of this option. Removal of jobs that were earlier considered to be the core and direct contributor roles for business, such as production in aerospace, might become the norm as companies also reassess their revenue areas and diversify into newer spaces in a post-pandemic world.

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