Bombardier to cut about 7000 jobs, hire for growth areas

Air Canada CEO Calin Rovinescu said the Quebec government’s decision to drop the lawsuit was part of the broader deal to purchase the CSeries and use a third-party Quebec supplier to perform all of the heavy maintenance on the aircraft. Almost half the cuts will be in Bombardier’s rail arm that has a large workforce in Europe.

The company has been under severe financial pressure despite receiving a $1 billion cash injection from the state government in Quebec previous year, as cost overruns on its new C Series jet have drained cash out of the company.

The first 25 aircraft on delivery will replace Air Canada’s existing mainline fleet of Embraer E190 aircraft, with the incremental aircraft supporting Air Canada’s hub and network growth, creating one of the world’s youngest, most fuel efficient airline fleets.

Bombardier advanced 7.8% to 97 Canadian cents in premarket trading.

“We are turning Bombardier around to make this great company stronger and more competitive”.

“Throughout 2016 and 2017, we will adapt our global manpower to current market conditions, while hiring to support growing segments”, Bellemare said in a statement.

Mark Masluch, company spokesman, says 150 of those jobs will be in the Bombardier business aircraft division and 70 will be from product development and engineering. However, I want to offer my thoughts to those workers across Canada who are affected by today’s restructuring announcement from Bombardier.

Bombardier Inc said it received the first order in 16 months for its CSeries aircraft, sending its shares up as much as 30 percent and overshadowing news of the planemaker’s lower-than-expected quarterly results and plan to cut 7,000 jobs.

Bombardier reviewed its business thoroughly over the past year, which was the basis of its decision to cut jobs.

Analysts on average had expected the company to earn 2 cents per share, according to Thomson Reuters I/B/E/S.

Shares of Bombardier, which also benefited from news of a planned reverse stock split, were up 19 percent at CUS$1.07 in midday trading after rising as high as CUS$1.17.

In addition to delivering best-in-class economics with the C Series aircraft, Bombardier has placed considerable emphasis on cabin design to ensure a superior passenger experience.

After consolidation, the shares will be priced between C$10 and C$20 each, the company said.

Meanwhile, since coming to office, the new Liberal government in Ottawa has been mulling the Bombardier request, which has significant political ramifications in Quebec where most of the company’s 24,000 Canadian workers are based.

Since Bellemare’s arrival at the helm, Bombardier has focused sales efforts on adding established airlines to a C Series order book dominated by lessors and small carriers. Bombardier Inc. plans to hire for its C Series aircraft program and other areas.

The C Series was launched to challenge the dominance of Airbus and Boeing in medium-range, single-aisle jetliners, and go head to head with their workhorses, the Airbus A320 and the Boeing 737. The jet can seat 108 to 160 people, a step up in size from Bombardier’s signature regional jets.