Raytheon Technologies Corp. will increase planned layoffs by 1,500, bringing the total job losses to 16,500 across the Massachusetts-based defense and commercial aerospace conglomerate, as its commercial aerospace business continues to suffer amid COVID-19.
The 1,500 layoffs will occur at aerospace components manufacturer Collins Aerospace, and additional 500 contractor positions will be cut from Collins, bringing its total reduction of contractors to 4,500. The company previously announced it planned 15,000 layoffs at East Hartford jet-engine maker Pratt & Whitney.
The layoffs amount to 20% of the two subsidiaries’ combined workforces, CFO Toby O’Brien said. They’re primarily driven by a continuing downturn in the commercial aerospace industry due to COVID-19.
“[Layoffs are occurring] as we continue to position the business for strength as the [commercial aerospace] industry recovers,” O’Brien said.
Raytheon’s profits in the fourth quarter amounted to $135 million, or 10 cents per diluted share, down from .$1.1 billion, or 76 cents per diluted share, a year earlier.
Drops in business were largely driven by the continued significant downturn of the commercial aerospace industry amid the COVID-19 pandemic.
Pratt & Whitney’s year-end sales were just under $16.8 billion, a 19% decline from 2019, when sales reached about $20.9 billion.
Collins Aerospace also saw its sales slump in 2020, with $19.2 billion compared with $26 billion in 2019.
CEO Gregory Hayes told shareholders in a Tuesday call that he thinks the commercial aerospace industry will start seeing a rebound amid distribution of COVID-19 vaccines, but the sector won’t likely recover to 2019 levels of commercial traffic until 2023.
“We do see brighter days ahead with the continuing rollout of the vaccines,” Hayes said. “I’m extremely confident that commercial aerospace will recover; it’s not a question of ‘if,’ it’s simply a question of ‘when.'”
Bright spots for Raytheon’s bottom line exist in its Intelligence & Space and Missiles and Defense businesses, which did about $3.9 billion and $4.2 billion in fourth quarter sales, respectively.
Additionally, Raytheon ended the year with a backlog of more than $67 billion, Hayes said.
Raytheon expects a slow first quarter of 2021, followed by three quarters of improvement, O’Brien said. Sales in the year’s first three months will likely be between $14.8 billion and $15.4 billion, O’Brien said. Over the next three quarters, O’Brien estimates sales will reach between $48.6 billion and $50 billion.
