KEY POINTS

  • The job cuts will hit its corporate headquarters, Pratt & Whitney, Collins Aerospace units
  • The cuts will reduce Pratt & Whitney’s workforce by 20% while Collins Aerospace’s staff will be trimmed by 12%
  • The moves are part of a plan to cut $2 billion in costs this year

Raytheon Technologies (RTX) will cut 15,000 jobs due to the ongoing aviation crisis -- nearly double the number of layoffs the aeropace and defense company announced in July.

The job cuts will hit the company’s corporate headquarters in Waltham, Massachusetts, its jet engine-making division Pratt & Whitney in East Hartford, Connecticut, and its aviation and military equipment manufacturing unit Collins Aerospace in Charlotte, North Carolina.

During a web conference with Morgan Stanley analysts, Raytheon CEO Greg Hayes said the cuts will reduce Pratt & Whitney’s workforce by 20% while Collins Aerospace’s staff will be trimmed by 12%.

“These cost actions include the elimination of more than 15,000 positions across our commercial aerospace and corporate organizations,” Hayes said.

The moves are part of a plan to cut $2 billion in costs this year.

Hayes warned more cuts might be forthcoming.

“Given the slope of the recovery, I think the folks have taken a more aggressive look at head count, and we’re really pushing through trying to exceed that $2 billion,” Hayes told the Morgan Stanley conference. “We’re going to look for additional savings this year.”

Hayes also emphasized that the process of closing factories and moving production activities will be a long drawn out affair and involve consultations with labor unions.

“We don’t want to screw anything up but we want to make sure that when this pandemic does end -- whenever that is -- that we’re actually in a position to have a lower cost structure than when we started,” Hayes said.

"Air travel is likely to lag until such time people have trust, faith, and confidence they can safely travel," Brian Marks, an economics professor at the University of New Haven, was quoted as saying by WFSB in Hartford, Connecticut. "Raytheon's announcement suggesting they may not see a return of the commercial airline aspect of their business until 2023 is not a surprise.”

Hayes insisted Raytheon’s defense business remains strong. In fact, the defense unit – which is separate from the commercial aerospace division – just received a $579 million contract from the Department of Defense to make F-135 propulsion system spare parts, spare engines and modules.

In the second quarter of 2020, Raytheon lost $3.8 billion versus net income of $1.2-billion, or $1.38 per share, in the year-ago period.