Meggitt to slash 1,800 jobs globally as Covid-19 hits demand
Around 1,800 jobs are being cut across UK engineering firm Meggitt’s global operations to slash costs as the coronavirus hits the civil aerospace sector hard.
The group, which makes parts used in planes, said it was axing around 15% of its 12,000-strong worldwide workforce in response to a slump in civil aerospace demand as it seeks to cut costs by up to £450 million.
It said it was too early to comment on where the jobs would be cut.
Meggitt employs 2,500 people in the UK and around 6,500 in the US, with other operations in countries including China, France, Vietnam and Singapore.
The group recently relocated its head office from Bournemouth Airport to Ansty Park near Coventry and is in the middle of merging five bases into the Coventry “supersite”.
It said: “To mitigate the reduction in demand, we have already taken action to reduce variable costs including accessing furlough schemes where available and reducing temporary labour.
“While we recognise the need to retain flexibility as demand patterns develop over the coming months, we have taken the difficult decision to reduce the size of our global workforce by around 15%, subject to ongoing consultation in the regions in which we operate.
“This action will ensure that our internal capacity across our civil aerospace business reflects the reduction in demand and positions us appropriately as we enter 2021.”
Other cost-cutting actions at the group include reducing executive salaries by 20%, freezing hiring and axing pay increases across its workforce, as well as reducing capital spend.
Plane giants such as Airbus and Boeing have halted or cut production after air travel has ground to a halt amid Covid-19 lockdowns worldwide.
But Meggitt said group revenue was up 5% in the first quarter thanks to strong growth in defence more than offsetting the civil aerospace woes and soft performance in its energy business.
It is bracing for a “significant reduction” in demand across its civil aerospace business in 2020.