Jobs in Britain could be under threat after Bombardier unveiled a new drastic round of job cuts, aimed at saving $300m (£245.1m) by 2018.
The Canadian transportation equipment manufacturer said on Friday (21 October) that it will cut 7,500 jobs, amounting to 10% of its total workforce worldwide, at a cost of between $225m and $275m to its finances in restructuring charges. The cuts could result in redundancies across both the aerospace and rail divisions in the UK, although further details of where the cuts will fall in specific countries will only be made public over the next couple of weeks.
"While restructuring is always difficult, the actions announced today are necessary to ensure Bombardier's long-term competitiveness and position the company to continue to invest in our portfolio while also deleveraging its balance sheet," said group chief executive Alain Bellemare.
"After de-risking our business last year, our focus has shifted to building a clear path to profitable earnings growth and cash generation. The actions announced today will ensure we have the right cost structure, workforce and organisation to compete and win in the future."
Simon Hamilton, economy minister in the Northern Ireland Executive, described the decision as "a shock", given the company won a number of major rail contracts and was looking to create approximately 3,400 jobs in the UK.
"This comes as a great shock to the Northern Ireland workforce," he said.
"Based on today's announcement from Canada it is clear that the combined pressures on both its markets and the ongoing need to drive competitiveness means the organisation is having to make further changes to its business to safeguard its future."
The round of job cuts is the second time in eight months that Montreal-based Bombardier has announced drastic plans to overhaul its workforce, after announcing in February that it would shed 7,000 jobs.
Approximately 1,000 of those positions were expected to go in the UK, amounting to 20% of the company's British aircraft workers, mainly in Northern Ireland.
In the 12 months to 31 December, Bombardier reported a 9.5% year-on-year decline in revenues to $18.2bn, and a net loss of $5.3bn, up from $1.2bn from the previous year. The company reported $5.6bn of writedowns and provisions, mainly on the C Series jet, whose development spiralled out of control with delays and cost over-runs running up a $6bn bill.