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Latest WestJet layoffs affect 3,333 employees as COVID-19 cripples airline industry

WestJet to layoff more than 3,300 employees due to COVID-19 pandemic
WestJet to layoff more than 3,300 employees due to COVID-19 pandemic

WestJet announced a number of organizational changes on June 24 that will affect the jobs of 3,333 employees, including consolidating call centre activity in Alberta, contracting out airport operations in many airports and restructuring its office and management staff.

Read more: WestJet backs away from labour code exemption that would facilitate mass layoffs

The moves are being made to position the company for “a competitive future following the COVID-19 crisis,” the Calgary-based airline said in a post on its website.

The pandemic has seen the airline park two-thirds of its fleet after border shutdowns prompted it to suspend most of its schedule — including all international trips — in late March.

Read more: Coronavirus pandemic: WestJet suspending international travel

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“Throughout the COVID-19 crisis we have had to make many challenging decisions. Today is the toughest of all of these difficult days as we look to provide thousands of our own employees with clarity on their roles at WestJet and the future of our airline,” the company said in a Tweet.

WestJet to cut workforce by nearly 6,900 people amid COVID-19 pandemic
WestJet to cut workforce by nearly 6,900 people amid COVID-19 pandemic

WestJet will contract out airport operations in all domestic airports outside of Vancouver, Calgary, Edmonton and Toronto.

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“Throughout the course of the biggest crisis in the history of aviation, WestJet has made many difficult, but essential, decisions to future-proof our business,” said Ed Sims, WestJet President and CEO.

Read more: Coronavirus: WestJet to rehire nearly 6,400 workers through federal wage subsidy

“Today’s announcement regarding these strategic but unavoidable changes will allow us to provide security to our remaining 10,000 WestJetters, and to carry on the work of transforming our business.

“WestJet will once again serve the needs of Canadian travellers with low fares and award-winning service levels tomorrow and years from now.”

Overall, 3,333 employees across the country will be affected, WestJet said.

The company said a priority in selecting airport partners will be preferential hiring interviews for some of the 2,300 WestJet airport workers now facing layoffs.

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“Here is a company that has taken a hard look at the future and has decided it doesn’t like what it sees,” School of Public Policy economics professor Ron Kneebone said.

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“It wasn’t that long ago you’ll recall that it was petitioning the government to open up air travel, and the government hasn’t done that; so I think they’re looking towards the future and realizing their business model has changed maybe forever and that they need to downsize to accommodate that.”

WestJet announces sweeping changes including more than 3,300 job cuts
WestJet announces sweeping changes including more than 3,300 job cuts

Read more: Travel will never be the same, thanks to COVID-19

The COVID-19 crisis has been devastating for the aviation industry as travel restrictions and fears about the virus has caused traffic to plummet.

Last week fewer than 7,500 passengers arrived at Canadian airports from the U.S., down more than 98 per cent from a year earlier, according to the Canada Border Services Agency.

International passenger numbers were down 95 per cent compared to a year earlier, the agency said Wednesday.

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Chief executives from 27 Canadian companies in sectors ranging from aviation to banking and telecommunications have called for a “measured” reopening of the skies that would see travel resume across all provinces and between select countries.

Airlines and travel industry ask that restrictions be loosened by summer
Airlines and travel industry ask that restrictions be loosened by summer

Kneebone said Canadian airline companies have continued to shrink and grow, as well as disappear and reappear over the years, using companies like Canadian Pacific, Canadian Airlines and Ward Air as examples.

He said WestJet is attempting to stay afloat for as long as possible to re-emerge on the other side of the pandemic as a profitable organization.

“Airlines come and go and I suspect we’re going to see a number of them go, and I suspect WestJet, with this decision, is I think trying to be one of those who stick around,” Kneebone said.

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“They can continue to be as they are — large — and maybe die as a result of it or maybe they’re going to shrink, try to become profitable as a smaller company and then hope maybe once a vaccine has arrived to maybe come back.” ​

Read more: WestJet adding more flights in July, but where are Albertans permitted to travel?

WestJet’s scheduled operations have dropped by more than 90 per cent year over year.

WestJet said it implemented immediate cost-cutting measures including releasing a majority of outside contractors, instituting a hiring freeze, stopping all non-essential travel and training, suspending any internal role movements and salary adjustments, cutting executive, vice-president and director salaries and pausing more than 75 per cent of its capital projects.

WestJet, which went private after Toronto-based Onex Corp. bought the publicly traded company, had employed 14,000 workers just before the pandemic struck in March, but now has a payroll of only 4,500.

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— With files from Canadian Press and Adam MacVicar, Global News