Embraer E175 American Eagle 1540 5f56dba24ddce

Embraer Cutting 900 Jobs as Demand Collapses

Sept. 8, 2020
The Brazilian aircraft builder is citing the global pandemic as well as the failure to complete a joint-venture partnership with Boeing for its new effort to manage the down trend in short- and medium-term demand.

Jet builder Embraer S.A. will cut its workforce by 4.5%, or about 900 employees, it said, to address the changes global aircraft demand resulting from the Covid-19 pandemic on the global economy, as well as the after-effects of Embraer's failure to complete a joint-venture partnership with Boeing Co. The Brazilian aircraft OEM stated its "objective is to ensure Embraer's sustainability and engineering capacity."

The pandemic has hurt the commercial aviation supply chain especially hard, as airlines have reduced their service, reducing maintenance requirements, and cut previously book orders for new aircraft. Embraer noted its Embraer Commercial Aviation subsidiary experienced a 75% year-over-year reduction in aircraft deliveries during the first half of 2020.

Embraer Commercial Aviation designs and builds twin-engine, narrow-body aircraft for regional and mid-range service.

This situation was made worse as a result of the failure of the Boeing partnership, with duplicate "structures" having been established within the subsidiary in expectation of the combination, prior the cancellation in late April.

Embraer further noted it has no expectation that the sector will recover in the short- or medium-term.

Embraer has said it already has taken steps to preserve employment positions and reduce costs since the pandemic began, including voluntary separations that have been accepted by 1,600 employees.

On the latter point, Brazilian news reports indicate public prosecutors are investigating whether these 1,600 employees were subjected to coercion before accepting buyouts.