Bombardier Inc (TSX:BBD.B) said it is cutting 2,500 jobs at its aviation unit and will take a related charge of $40 million this year, as the COVID-19 pandemic hurts sales of the business jets it manufacturers.
The company is in the process of selling its rail business to French TGV high-speed train maker Alstom for $7 billion and said that the deal has not been affected by the coronavirus crisis.
Separately, Bombardier said it is also temporarily laying off 196 employees working on regional transit services in the Greater Toronto Area due to a steep decline in ridership numbers amid the COVID-19 pandemic.
The company said the job cuts will take effect on June 21 and amount to 20% of its workforce at GO Transit and the Union Pearson Express. Both rail services are owned by the Metrolinx transit agency, which contracts out operations to Bombardier.
Bombardier said ridership in Greater Toronto has dropped by 90% due to the impact of the coronavirus pandemic, prompting a reduction in service levels. Commuting to and from work has plummeted as confinement measures closed businesses, triggered layoffs and prompted work-from-home measures.
Air passenger numbers have also plunged, with international traveler volumes falling 98% year-over-year at Canadian airports last week, according to the Canada Border Services Agency.
