Raytheon Technologies has plans to cut 15,000 jobs this year amid the coronavirus pandemic that has resulted in a downturn in the aviation industry. The latest elimination by the defense and aerospace company comes on top of 8,500 job cuts. Raytheon Technologies chief executive officer Greg Hayes said that the move includes the job cut of over 15,000 positions. “Raytheon is hopeful of cutting down general and administrative expenses by 20 per cent through these job cuts,” Hayes said. He added that the step would reduce expenses at subsidiary Collins Aerospace by 12 per cent.
In a bid o reduce expenses, the company is also considering on reducing the amount of office space globally by around 20 to 25 per cent. The move will be implemented over the next four to five years. Earlier, the CEO had said that Raytheon expected to cut office space by only 10 per cent. Hayes said that the company is reducing structural costs so that they can emerge stronger with a higher-margin business when air traffic resumes as normal over the next few years. According to Hayes, it will take at least 3 years for the air travel business to fully recover.
As recently as 2019, Pratt & Whitney had around 13,000 workers in East Hartford and Middletown. Raytheon, then known as United Technologies Corporation, had decided to hire around 35,000 workers after Pentagon orders surged in 2018. According to Hayes, Raytheon is adding around 8,000 jobs as the conglomerate is strong on the defense side. But many airlines are facing a tough time as commercial air traffic has come down by about 45 per cent globally. This is why several airlines are deferring maintenance by using early retirement for planes. This allows fleets to swap engines that have some time still left. But this has led to financial losses for Pratt & Whitney. The company has posted a loss of around USD 151 million in the June quarter. The revenue was down by 30 per cent from the second quarter of last year. Hayes said that the company had some benefits because of an increase in the repair and maintenance demand of engines.