GE's aviation unit to cut 10% of U.S. workforce: CEO

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© Reuters. FILE PHOTO: General Electric Co. Chief Executive Officer Larry Culp at the company’s annual meeting in Tarrytown© Reuters. FILE PHOTO: General Electric Co. Chief Executive Officer Larry Culp at the company’s annual meeting in Tarrytown

(Reuters) – General Electric Co’s (N:) aviation unit plans to cut its total U.S. workforce by about 10%, Chief Executive Officer Larry Culp said on Monday, as airlines delay purchases and ground planes amid the coronavirus pandemic.

In a letter to employees, Culp also said he would forgo his salary for the rest of 2020. His total compensation was $24.6 million in 2019. (https://reut.rs/3aetSlc)

“What we don’t know about the magnitude and duration of this pandemic still outweighs what we do know,” Culp said.

Airlines around the world have been forced to cancel flights and ground fleets as governments impose travel restrictions to contain the spread of the rapidly spreading virus.

The lack of aircraft maintenance activity will affect about half of GE’s U.S. maintenance, repair and overhaul workforce for 90 days, Culp said.

The cost reductions will result in 2020 savings of between $500 million and $1 billion for GE, which has already placed a hiring freeze and canceled salaried merit increases for employees.

The company’s aviation business makes engines for Boeing Co (N:) and Airbus SE (PA:) aircraft.

GE had about 205,000 employees in 2019, of which about 52,000 worked at its aviation unit.

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