Embraer to Cut Jobs Following Failed Boeing Deal

Brazilian manufacturer attributes further workforce reductions to COVID-19 and a partnership that turned sour 

Embraer has announced that it intends to reduce its global workforce by 4.5%, equating to around 900 employees.  

The aircraft manufacturer blames the impact of the COVID-19 pandemic on the global economy, and the cancellation of the company’s partnership with Boeing for the cuts to personnel numbers. 

The Brazilian firm says the pandemic has particularly affected its Commercial Aviation division, which experienced a 75% reduction in aircraft deliveries during the first half of this year, as compared to the same period in 2019.

Photo: Wikimedia Commons/Steve Lynes

In a statement, the airframer said: “The situation worsened as a result of the duplication of structures associated with the carve-out of the company’s commercial aviation business in preparation for the partnership which was terminated at the initiative of Boeing, as well as the expectation that the air transport sector will not recover in the short- or medium-term.” 

The joint-venture, which was established in February 2019, would have seen Boeing purchase an 80% stake in Embraer’s commercial aircraft division which houses the company’s popular E-Jet family.  

The move by the US firm was seen as a response to Airbus’ 2017 deal with Bombardier for its C Series programme, which it later rebranded as the A220. 

Boeing called off the agreement in April this year, stating the collapse of the deal was as a result of unsuccessful negotiations about unsatisfied Master Transaction Agreement (MTA) conditions.

Photo: Flickr Commons/TDelcoro

Embraer disagreed, saying the US firm had “wrongfully terminated the [agreement], it has manufactured false claims as a pretext to seek to avoid its commitments to close the transaction and pay Embraer the $4.2bn purchase price.” 

These latest job losses come after around 1,600 employees chose to participate in a company-led voluntary dismissal plan (VDP) earlier this year.