Analysis of Bombardier's Downsizing and Restructuring Efforts

This report examines Bombardier's human resource downsizing and restructuring efforts in recent years. The company, a major manufacturer of airplanes and other aerospace products, faced challenges including cost overruns, cash flow problems, and market share drops, particularly related to its C-Series project. To address these issues, Bombardier implemented a restructuring plan involving job cuts, the sale of certain business units, and a focus on its Global series of business jets. The downsizing aimed to reduce operational costs, particularly by outsourcing labor to countries with lower labor costs. The report analyzes the challenges that led to the downsizing, the strategic decisions made, and the company's plans for future financial goals, including increased revenue and market share. The report also mentions Bombardier's efforts to assist laid-off employees through reclassification programs.

Running head: BOMBARDIER DOWNSIZING
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Bombardier Downsizing
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Bombardier Downsizing
Bombardier is one of the organizations that have been undergoing human resource
downsizing in previous years. The company’s downsizing plan seeks to cut 7,500 jobs by mid-
2020 and thus achieve an annual saving of US$250 million. Bombardier is a large manufacturer
of different airplanes that have been successful in the last years (Bombardier, 2019). Apart from
manufacturing aerospace machinery, the company has also diversified in military aviation
services, recreational products and public transportation buses that are highly effective.
According to Financial Post (2015), the challenges of the organization started with the
launch of its C-Series project that was first launched in 2004. Since late 2013, the company has
been facing several challenges like cost overruns that are due to delays in its core C-Series. The
organization has also been having cash flow problems with its short-term capital resources being
estimated at around $3.8 billion and thus the need for the company to raise more capital until the
C-Series comes to the market. The organization was also forced to suspend some of its projects
due to liquidity problems in an attempt to keep the C-Series project. Lastly, the C-Series project
had been targeted at 300 clients but the company had only managed to acquire 243 clients by
2013 which means it felled short of the required target. Thus O'Neill (2016) suggests that a three-
year delay in C-Series damaged the order book of the book which led to positive industry
reactions by Boeing and Airbus that discounted their orders to increase their supplies in the
market thus affecting the demand for Bombardier’s business problems.
The company has been facing market share drops in recent years which has led to a
reduction in its revenue. To solve this problem, the company was forced to restructure by selling
off Q400 turboprop aircraft and the sale of its flights training business CAE to concentrate on the

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production of Global series of long-range business jets which will lead to the recovery of its
revenue by 2020. This means that the company was forced to downsize its human resource
personnel after restricting its business operations. This means that the employees who were
aligned to the business lines that were sold off were affected and had to be laid off.
The restructuring process means that the company will be losing some of its business
productions to other organizations which means that the positions are reduced. Thus the
downsizing of the employees is purely based on the restructuring plans that have made the
company to have no choice but to lay off the employees since they are no longer required by the
organization. The fact that the company laid off 7,500 workers around the world and the
company has plans of hiring 3,700 employees in countries with lower costs shows that the
restructuring process seeks to reduce the operational costs and increase revenue that it has been
losing in countries that have been expensive to run business like Canada. Russell (2016) argues
that the decision to outsource labor is based on the shift from Canada’s high unit labor costs and
the protectionist policies of the country that make the company less competitive. This value
chain relocation strategy to less competitive countries will result in reduced labor costs thus
profiting the company.
However, to assist the laid down employees, the company is assisting the employees by
assisting the employees to find new jobs within the company through reclassification, a process
that will take eighteen months. After the restructuring process, the organization expects to
achieve its financial goals by 2020 which will include increased revenue and market share.

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References
Bombardier. (2019, March). Products and Services . Retrieved from Bombardier :
https://www.bombardier.com/en/home.html
Financial Post. (2015, February 12). Bombardier Inc: The top 5 problems that need to be fixed.
Financial Post. Retrieved from
https://business.financialpost.com/transportation/bombardier-inc-the-top-5-problems-
that-need-to-be-fixed
O'Neill, J. (2016, February 17). Bombardier: How did their problems occur? BBC News.
Retrieved from https://www.bbc.com/news/uk-northern-ireland-35430587
Russell, A. (2016, October). Bombardier layoffs a symptom of Canada’s failure to stay
competitive, says expert. Global News. Retrieved from
https://globalnews.ca/news/3018471/bombardier-layoffs-a-symptom-of-canadas-failure-
to-stay-competitive-says-expert/