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Bombardier plans to lay off 1,700 workers from its aerospace division, mostly around Montreal. The layoffs represent 6 percent of the Bombardier Aerospace work force.
The move comes just days after Montreal-based Bombardier Aerospace announced another delay in its C Series all-new jet program.
The manufacturer has also experienced delays in the launch of its Learjet 85 business jet.
On Monday, Bombardier aerospace said aircraft orders in 2013 fell to 388 units from 481 units in the previous year.
The company blamed the decline on a sluggish global economy and slow recovery.
The lion’s share of the cost-cutting layoffs are planned for operations at major assembly locations in Montreal and Mirabel, Que.
The decision was disclosed to employees in an internal memo on Tuesday, the company said.
Workers affected by the layoffs will be notified in the coming weeks.
About 1,100 Bombardier Aerospace workers in Canada are to be laid off, with another 600 in the United States, Bombardier said in an internal memo.
Three hundred of the 1,700 positions were already slated for elimination in December.
The areas affected include manufacturing and assembly, engineering, sales and support functions.
The memo pointed to the C Series, Learjet 85 and two new business jets as areas where the company has made significant investments.
“Stricter controls over spending must be implemented to ensure we consistently meet our budget throughout 2014,” Sylvie Bourdon, vice-president of human resources said in the memo.
The layoffs affect both unionized and salaried permanent employees, the memo said.
“The aviation industry still faces challenges,” Bourdon said in the memo.
Moody’s Investors Service recently issued a note saying the C Series entry-into-service delay is “credit negative” because it will increase program costs, complicate efforts to clinch additional orders and hobble the company’s ability to reduce cash burn and debt.
Moody’s says it expects C Series development costs to exceed $4 billion US, including $1.4 billion from governments and suppliers.
“The delay could also require Bombardier to lower prices to drive new orders and will likely increase working capital requirements, which would pressure the company’s liquidity,” it said.
Bombardier Aerospace said last week that the C Series commercial jet won’t be ready to go into service until the second half of 2015, and not in September 2014 as previously targeted.