WestJet reduces its workforce drastically due to the impact of COVID-19 on airline industry

Calgary, Canada - Canadian carrier WestJet reduces its workforce by half as a result of a lack of demand for air travel due to the COVID-19 pandemic.

6,900 employees out of a total of 14,000 received notices of voluntary and involuntary leaves. In a video message posted online by the company, CEO Ed Sims called the cuts “devastating.”

We are now operating at the same size that we were back in 2003,

Sims said, adding 90 percent of the departures were voluntary and take the form of early retirements, unpaid leaves of absence and voluntary resignations. Some employees have also accepted pay cuts or reduced workweeks.

I commend those who chose to stand down so our airline can stand up. WestJet management will fight tooth and nail” to preserve the company. We will look to rising again,

Sims said.

WestJet and other airlines around the world have seen their revenues dry up as a result of the COVID-19 pandemic, which has led to border closures, canceled flights and a near-complete collapse in leisure travel demand.

Sims said Tuesday that WestJet has now grounded 120 aircraft, two-thirds of its fleet. And other than ongoing repatriation flights to bring home Canadians stranded internationally, the airline that until recently had set its sights on global expansion is no longer flying beyond the borders of its home country.

WestJet has also implemented immediate cost-cutting measures, including releasing more than 80 percent of its contract workforce, instituting a hiring freeze, stopping all non-essential travel and training, suspending any internal role movements and salary adjustments, pausing more than 75 percent of its capital projects and asking suppliers for a reduction or delay in payments.

The airline’s executive team has taken a 50 percent pay cut, while vice-presidents and directors have taken a 25 percent pay cut.

Rick Erickson, an independent aviation consultant based in Calgary, said while he was surprised by the scale of WestJet’s workforce reductions, he said other Canadian airlines are facing similar circumstances. Air Canada has already announced 6,000 job losses out of a total workforce of approximately 30,000, while Air Transat has announced it is cutting 70 percent of its workforce or 3,600 people. Sunwing Airlines has also laid off pilots and cabin crews.

By my calculations, what we’ve lost so far is roughly 17,000 jobs out of just over 50,000 between the four big players,

Erickson said.

*That’s roughly a third of the employees of the four largest airlines in the country.

In a news release Tuesday, WestJet said it is “actively engaged” with all levels of government and continues to emphasize the depth of the impact of the crisis on the airline industry.

Alberta Premier Jason Kenney took to Twitter on Tuesday to express his sadness over the WestJet job cuts and said the entire aviation sector is struggling to cope with the COVID-19 crisis.

“Yesterday I asked the Prime Minister to ensure that @WestJet receives an equitable share of any federal support for airlines,” Kenney tweeted.

Erickson said while there is a consensus the airlines will need some kind of federal assistance to weather the pandemic, it’s unclear what form that will take. There would be resistance within WestJet and from the general public to a bail-out package that would involve the federal government taking on any kind of equity stake in the company, he added.

Erickson said Onex Corp. — the privately held Toronto-based company that acquired WestJet in a blockbuster $5-billion deal last year — has deep pockets and is making careful decisions about the future.

(These job cuts) are about them trying to set the airline right now so it can survive,

he said.

They want to ensure that WestJet gets through this, that it comes out of this with a pretty strong and robust operation that can capitalize on any growth when this is over.

The first wave of WestJet job reductions is effective as of March 26, with the second wave effective April 1. The company said it could not provide a timeline on when employees who have taken leave may be invited back.