- Aerospace designer, Héroux-Devtek (TSX:HRX) is laying off staff and shutting down its plant, as aviation continues to wither under COVID-19
- The company is reducing its workforce by 10 per cent, which equates to around 225 employees
- Furthermore, Héroux-Devtek is closing its plant, formerly known as Alta Precision
- The measures will cost the company around C$12 million, which it will include in its first quarter results
- Héroux-Devtek (HRX) is up 2.72 per cent, with shares trading for $10.95 and a market cap of $398.2 million
Aerospace designer, Héroux-Devtek (TSX:HRX) is laying off staff and closing its production plant, as aviation withers under COVID-19.
The company is the third largest landing gear manufacturer in the world. Since the pandemic started, it has seen a significant downturn in its commercial business.
As a result, the company is reducing its workforce by 10 per cent, which equates to around 225 employees. Furthermore, the company is shutting down its plant, which was formerly known as Alta Precision.
The measures will cost Héroux-Devtek around C$12 million, which it will include in its first quarter results.
The company largely exports abroad, with around 90 per cent of its sales outside of Canada. Around 50 per cent of these sales are to the US. Ongoing travel bans have exacerbated the company’s inability to manoeuvre an already struggling industry market.
Héroux-Devtek’s President and CEO, Martin Brassard, believes these measures are necessary, given the recent challenges facing the industry.
“While our defence activities have been generally insulated from the global pandemic, we are seeing lower demand for our commercial products. We must therefore take the difficult but necessary decision to rationalize our cost structure by adjusting our manufacturing capacity to the current unprecedented environment.
“We regret the impact these actions will have on affected employees and will put in place appropriate measures to support them,” he said.
Since the pandemic’s economic effects began to hit the industry in early February, Héroux-Devtek’s share value has almost halved.
Héroux-Devtek (HRX) is up 2.72 per cent, with shares trading for $10.95 at 9:56am EDT.