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Be the first with the news that moves the market- Specialised training company, CAE Inc (TSX:CAE), is suspending dividends and laying off staff as the COVD-19 pandemic continues to impact the company’s revenue
- CAE is laying off 2,600 staff and placing another 900 on a reduced work week, as well as implementing company-wide salary reductions in an effort to retain liquidity
- The board also approved a suspension of the common share dividend and share repurchase plan until further notice
- Announced alongside this news, CAE’s healthcare sector is currently developing an emergency ventilator to combat the pandemic
- CAE Inc (CAE) is up 4.29 per cent, with shares trading for C$17.52 and a market cap of $4.66 billion
Specialised training company, CAE Inc (TSX:CAE) is implementing a series of drastic cost-saving measures in the wake of the COVID-19 pandemic.
Most notably, the company is laying off 2,600 staff and placing another 900 on a reduced work week. This has cut the company’s staffing levels by around a quarter.
To access government relief, the company is actively monitoring various assistance packages globally. Once accessed, CAE hopes to re-hire staff back at a later date.
The company has also cut wages across its operations, including a 50 per cent cut to the CEO’s salary.
In a further effort to retain cash, the company has suspended its common share dividend and share repurchase plan. The suspension is effective immediately and was approved by the board, given the challenging circumstances.
CAE provides trading for airline pilots around the world. Ongoing travel disruptions and flight bans caused by COVID-19 concerns have wreaked havoc with the aviation industry in recent months.
As a result, the company has seen a steep drop off its in business. These drastic measures announced today hope to offset the expected reduction in revenue over the coming months.
On a positive note, the company’s healthcare sector is currently developing an emergency ventilator in an effort to combat the pandemic. CAE is in the process of sourcing parts for the project and awaiting approval by Health Canada.
Marc Parent, CAE’s President and CEO, remains optimistic about the future despite the challenges facing the company.
“We entered this crisis from a position of strength with a leading market position, a balanced business with recurring revenue streams, and a solid financial position.
“Taking decisive yet flexible action will help to protect our people and operations over the short-term and gives us the necessary agility to resume long-term growth when global air travel returns,” he said.
CAE Inc (CAE) is up 4.29 per cent, with shares trading for C$17.52 at 12:56pm EST.
