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Bentley and Bombardier announce thousands of job cuts

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A row of unfinished Bombardier Global Express aircraft is seen at a Bombardier plant in Montreal on Friday, June 5, 2020.
A row of unfinished Bombardier Global Express aircraft is seen at a Bombardier plant in Montreal on Friday, June 5, 2020.   -   Copyright  Paul Chiasson/The Canadian Press via AP
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Two major companies in the automotive and aviation sector announced major job cuts on Friday.

Bombardier Aviation, based in Canada, and British carmaker Bentley are set to cut 2,500 and 1,000 jobs respectively.

Both cited the coronavirus crisis as a factor and it comes hot on the heels of other grim news regarding the economy.

Late last month Nissan announced the closure of its Barcelona branch, which it says will see 3,000 jobs go.

Bentley job cuts is latest blow to British automotive market

Luxury British carmaker Bentley plans to cut up to 1,000 jobs — a quarter of its workforce — and has warned that other cuts could follow as it tries to limit the damage caused by the virus outbreak.

The brand, which employs 4,200 people in the UK and belongs to the German group Volkswagen, said that it had offered voluntary departures.

"Losing colleagues is not something we take lightly, but it is necessary to protect the vast majority of jobs that remain," Bentley's CEO Adrian Hallmark said.

"COVID-19 was not the cause but an accelerator" of the difficulties, he acknowledged, suggesting that the decision could also be linked to the company's ongoing transformation plan.

This announcement is another blow to the British automotive sector.

Aston Martin, another luxury brand, announced 500 job cuts, dealership chain Lookers is cutting 1,500, while McLaren has decided to reduce its workforce by 1,200 people.

"This is a dark week for the British automobile," which "is solid but not invincible," Mike Hawes, general manager of the Society of Motor Manufacturers and Traders (SMMT), stated.

Bombardier says it must adapt to the current "size of the market"

"Bombardier Aviation has made the difficult decision to reduce its workforce by approximately 2,500 employees. The majority of these reductions will impact manufacturing operations in Canada and will be carried out progressively throughout 2020," the company said in a press release.

Bombardier said that it had to make the move because business jet deliveries, industry-wide, are forecast to be down approximately 30% year-over-year due to the pandemic.

"Bombardier must adjust its activities and its workforce to ensure that it emerges from the current crisis on solid foundations," added the Montreal-based group.

These layoffs represent around 10% of the workforce at Bombardier Aviation, a branch which manufactures business aircraft and has around 22,000 employees among the group's 60,000.

The company anticipates an approximately €35.4 million charge related to the job cuts.

"It's a matter of adjusting to the size of the market to be competitive," Bombardier spokesperson Mark Masluch told public broadcaster Radio Canada.

In early May, Bombardier reported losses for about €176.8 million in the first quarter of 2020 due to the impact of coronavirus.

In February, the company had reached an agreement for the selling of its rail transportation branch to French group Alstom and to Caisse de depot et placement du Quebec (CDPQ) for a price of about €5.8 to €6.2 billion.

The group has withdrawn from commercial aviation to focus exclusively on business jets.

Heavily indebted, Bombardier recorded losses for €1.4 billion in 2019.