Embraer Slashes Work Force 20 Pct Amid Crisis

Brazil's Embraer plane maker will cut its work force by about 20 percent because the global financial crisis has sharply reduced demand for its mid-sized passenger jets and executive jets, the company said Thursday.

Empresa Brasileira de Aeronautica SA did not specify the precise number of posts that will be eliminated, but said the amount represents about 20 percent of its global work force of 21,362 people.

The company said its decision to cut costs and jobs was forced by a "the new reality of demand for commercial and executive aircraft," according to a statement.

Most of the job losses will hit Embraer's production and administrative units, including a layer of management that the company did not describe in detail. But most engineering posts will be maintained to develop new products and technology, Embraer said.

The company is the world's fourth-largest plane maker after U.S.-based Boeing Co., Europe's Airbus and Canada's Bombardier Inc. Most of its workers are employed in Brazil.

Embraer also said it was revising downward its revenue guidance for 2009 to $5.5 billion, corresponding to 242 deliveries of commercial and executive jets.

The Agencia Estado news service said Embraer's previous 2009 delivery prediction was for 270 jets.

Embraer said it was particularly exposed to the economic problems because "over 90 percent of its revenues are generated abroad. Therefore, the resiliency that the Brazilian domestic market has been demonstrating through the crisis does not significantly alter this adverse scenario."

While Brazil has been hit by the meltdown, its economy appears to be limping along with slow growth — in contrast to the recessions that have for Europe and the United States.

Embraer's main production facility and headquarters are in Brazil, but it also has operations and offices in China, France, Portugal, Singapore and the United States.

An Embraer spokesman said the company would not immediately comment further on the job cuts and the statement did not say whether job cuts would happen outside Brazil. He spoke on condition of anonymity, per policy.