MONTREAL – Bombardier is laying off 1,700 employees in its aerospace division, mostly in Montreal, as it steps up efforts to cut costs amid delays with two new aircraft and a tough market.
The company disclosed the decision to its workforce in an internal memo that says affected employees will be notified in the coming weeks, Bombardier spokeswoman Haley Dunne said Tuesday.
“We’ve been managing our costs over the past year and this is something we need to do now to continue to manage the business prudently,” she said in an interview.
The Montreal-based transportation company has tried to reduce costs as it continues to invest billions of dollars in new aircraft programs such as the CSeries airline jet, and the Learjet 85 and Global business jets.
Dave Chartrand of the Machinists union said the positions being cut over the next few months include 300 contractors, hundreds of engineers, about 120 temporary employees and others hired to work on special projects.
“There are guys that will be recalled but for now, between the programs that have been slowed down and the CSeries, there is a period where there will be a little less work,” Chartrand said in an interview.
The announcement Tuesday follows several recent setbacks for Bombardier, which is the world’s third-largest aircraft manufacturer after Boeing and Airbus.
It announced last week that its new CSeries commercial jet won’t be ready for service until the second half of 2015, several months later than its already-delayed previous goal.
On Monday, Bombardier said it received 19 per cent fewer new orders for commercial and business aircraft last year than in 2012.
Dunne said Tuesday’s decision is the result of a variety of factors and is not specifically tied to the CSeries delay.
“It’s across the business,” she said.
The layoffs represent six per cent of the workforce at Bombardier Aerospace, one of the company’s two main divisions. Bombardier is also the world’s largest producer of rail equipment for transit systems.
About 1,100 of 22,200 Bombardier Aerospace employees in Canada are affected by the pending layoffs, about 80 per cent in Montreal.
In the United States, another 600 of 5,700 positions are affected.
The positions being cut involve contractual, permanent, unionized and management positions. They include 300 already eliminated in December.
Bombardier said it won’t detail what jobs and locations will be affected until employees are notified. None of the cuts affects employees in Mexico or Northern Ireland.
Dunne said some of the employees may have a chance to fill several hundred vacant positions.
“It’s never easy to have to have this type of news and we’re very aware of the impact on our employees and very conscious of the need to respect them in order to speak to them individually over the course of the next few weeks.”
Bombardier has a history of cutting jobs during difficult market periods and then hiring back workers when demand improves. It will also be hiring hundreds of new workers to assemble the CSeries at its facility being built in Mirabel, north of Montreal.
On the Toronto Stock Exchange, Bombardier’s shares lost seven cents, or 1.7 per cent, at C4.04 in early Tuesday afternoon trading.