General Electric (GE) - Get General Electric Company (GE) Report announced that its aviation division will reduce its U.S. workforce by 10% and that GE Aviation CEO David Joyce will forgo half of his salary starting April 1.
"Our hardworking, determined employees are the heart of our business, and it is difficult to have to take these steps due to external factors like this. But we must respond immediately with every action within our control to protect our ability to serve our customers now and as the industry eventually recovers," Joyce said in a statement.
The workforce cut will be stacked on the company's other cost-cutting initiatives that already are in place including a hiring freeze, the cancellation of the salaried merit increase, a "dramatic reduction" of all non-essential spending, and a significant decrease in its contingent workforce.
The company also announced there will be a temporary lack of work, which will impact about 50% of its U.S. maintenance, repair and overhaul employees for 90 days.
"The aviation industry is feeling the impact of this global pandemic most acutely. The rapid contraction of air travel has resulted in a significant reduction in demand as commercial airlines suspend routes and ground large percentages of their fleets. As a result, GE Aviation is announcing several steps that, while painful, preserve our ability to adapt as the environment continues to evolve," the company said in a statement to employees.
The company added that its financial foundation is "sound," but that it did not know the magnitude and duration of the coronavirus pandemic
The company also said that it was supporting efforts by the U.S. government to preserve the aviation industry, though it has not sought any provisions in the stimulus bill that will benefit the company exclusively.
GE shares fell 0.6% to $6.48 in trading Monday.