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The airline Virgin Atlantic has announced plans to slash 3,150 jobs across its workforce, blaming the “devastating” coronavirus crisis.
The company, majority owned by Virgin tycoon Richard Branson, warned a recovery in air travel could take up to three years, with travel fears and lockdowns hammering passenger numbers.
It comes after recent announcements by Ryanair and IAG-owned (IAG.L) British Airways of similar drastic cost-cutting measures including thousands of redundancies.
Shai Weiss, CEO of Virgin Atlantic, said in a media statement: “We have weathered many storms since our first flight 36 years ago, but none has been as devastating as COVID-19 and the associated loss of life and livelihood for so many.
“However, to safeguard our future and emerge a sustainably profitable business, now is the time for further action to reduce our costs, preserve cash and to protect as many jobs as possible. It is crucial that we return to profitability in 2021.”
The company will also stop using Gatwick, focusing only on Heathrow flights. Virgin’s travel arm Virgin Holidays will close 15% of its branches and be rebranded Virgin Atlantic Holidays as part of the cost-cutting plans.
Only within the past fortnight a spokesperson had told Yahoo Finance UK the company was in a “stable position.” The company said on Tuesday it had tried to safeguard jobs, but “regrettably” announced plans to consult staff and unions over redundancies from Tuesday.
It has been trying to secure a government bailout, warning previously it risked collapse without such support. Branson wanted a £500m ($624m) rescue package involving commercial loans and guarantees.
The appeal appears to have fallen on deaf ears so far, but the airline maintains discussions are “ongoing.” Last month the airline was also reported to have approached more than 100 potential investors in a bid to raise cash.