Montreal-based flight-training firm CAE Inc. said Thursday that it's slashing 700 jobs and imposing cost-cutting measures on its remaining workforce in anticipation of a dropoff in orders from the civil aviation sector.
The job cuts will be done in two phases and trim about 10 per cent of CAE's workforce, including 600 at its Montreal operations.
CAE hopes the moves will reduce costs about $15 million a year but there will be a $34-million restructuring charge recorded in the quarter ending June 30.
About 380 employees will be cut in the next few weeks and the rest in the fall. About 70 management positions are included in the cuts.
"Effective immediately, management and most other employees globally will be subject to a salary freeze and will have five mandatory furlough days over the current fiscal year. We have also introduced new limits on overtime, and we are offering early retirement incentives to qualifying employees," the company said.
Good News, Bad News
CAE says it has unprecedented orders on the military side of its business, but sees falling orders to come on the civil side as the economic downturn affects the aviation industry.
The anticipated downturn follows a profitable year for CAE.
The company reported a 31 per cent increase in annual profits to $199 million for the 12 months ended March 31 on what it says has been a successful diversification strategy and financial discipline.
Military orders totalled $1.09 billion for the year ended march 31, the largest annual military order intake in CAE's history.
