Air Canada to reduce their workforce; at least 20,000 employees to be affected

“We, therefore, took the extremely difficult decision today to significantly downsize our operation to align with forecasts, which regrettably means reducing our workforce by 50 to 60 percent,” it said. (File photo: @snowjam/Unsplash)

Due to the negative impact of the coronavirus diseases 2019 (COVID-19) pandemic to the travel industry, Air Canada said it will be laying off more than half of its employees.

The 38,000 employees of Canada’s largest airline will be reduced by at least 20,000 by June 7, Air Canada announced.

The decision comes amid the ongoing closure of borders and confinement measures implemented to slow down the spread of the virus. This eventually forced Air Canada to ground some 225 airplanes and cut flight capacity by 95 percent.

“We, therefore, took the extremely difficult decision today to significantly downsize our operation to align with forecasts, which regrettably means reducing our workforce by 50 to 60 percent,” it said.

In March, Air Canada announced that they are putting their 15,200 workers on “Off Duty Status” and “furlough about 1,300 managers,” as they struggle with the fallout from the pandemic. But in April, the airline said they will put back these workers on the payroll, with the help of a wage subsidy program of the federal government.

The Canada Emergency Wage Subsidy (CEWS) is intended to help businesses affected by the COVID-19 crisis keep their employees on the job or re-hire their workers whom they already laid off. Under the program, the eligible companies will be receiving a subsidy of 75 percent of an employee’s pay, at $847, per week. It was set to expire on June 6 but the Canadian government announced that the CEWS will be extended by another 12 weeks or until August 29.

Citing an international bulletin from the Canadian Union of Public Employees (CUPE), the Canadian Press reported that the airline is set to ask its flight attendants to reduce their schedules, go on leave for up to two years, or resign with travel privileges.

It also reported that CUPE is in talks with Air Canada regarding the continuing of the wage subsidy.

As the pandemic continues to wreak havoc on the travel and tourism sector, Air Canada earlier said it recorded a net loss of $1.049 billion in its first quarter this year, compared to its net income of $345 million in the first quarter of 2019.