Roughly 20 Percent Of Global Jobs Will Be Cut

Brazilian planemaker Embraer is the latest aircraft manufacturer to announce massive layoffs, blaming a likely reduction in orders and production during what looks to be a very difficult year.

In a communique issued Thursday, Embraer announced it plans to lay off about 20 percent of its 21,362 employees, with the majority of job losses coming from the production and administrative areas. The company will also cut an entire level in the company's current management structure.

"[I]t has become inevitable to implement a revision to its cost structure and workforce, adjusting them to the new reality of demand for commercial and executive aircraft," Embraer stated. "Although Embraer has its headquarters in Brazil, the Company depends primarily on export markets and on global economic performance -- over 90 percent of its revenues are generated abroad.

"Therefore, the resiliency that the Brazilian domestic market has been demonstrating through the crisis does not significantly alter this adverse scenario."

Embraer added the "significant majority" of the engineering workforce will be kept engaged in programs for development of new products and technologies, which will be kept unchanged.

As a result of those layoffs, Embraer also revised its revenue projections for 2009 to US$ 5.5 billion, projecting 242 commercial and executive aircraft deliveries.

"Embraer expresses its profound respect for the people who are now leaving their positions with the Company," the planemaker added. "Respect for the work they performed, for their professional and personal contributions during their tenure, and for the difficult moment they are facing."

FMI: www.embraer.com