CAE to cut 350 jobs, majority in Montreal
CAE Inc. is planning to cut 350 people out of its global workforce over the coming year.
August 18, 2015 By The Canadian Press
The company said about 80 per cent of the cuts will be in Montreal, where the company has its head office and largest production facility.
The job cuts — representing about four per cent of its 8,000 employees — are part of efforts by the flight simulator and training company to improve its production processes and revamp its business focus.
“This will ensure that CAE maintains a strong leadership position in a highly dynamic market and will create an even wider gap between CAE and its competitors,” said Marc Parent, its president and chief executive officer.
“We will do everything we can to mitigate the impact on those of our employees and their families who will unfortunately be affected by these changes.”
The company expects an additional $19 million of restructuring costs, in addition to $5.7 million recorded in the company’s fiscal first quarter, which began April 1. After the quarter ended on June 30, CAE sold its mining technology business to Constellation Software, a Toronto-based company that operates in several industries. During the first quarter of CAE’s 2016 financial year, its overall revenue grew nearly six per cent to $557 million, due to increases in its civil aviation and health technology businesses.
Revenue from CAE’s defence and security business was stable at $196.9 million but revenue from civil aviation training rose nine per cent to $336.2 million and Healthcare contributed $23.9 million, up 23 per cent.
Net income for the three months ended June 30 was also up from a year earlier, rising to $44.5 million from $41.6 million. Excluding restructuring costs, net income would have been $50.6 million, up from $43.8 million.
CAE says it recorded $5.7 million in restructuring expenses, after tax, related to an ongoing transformation of its production processes and product offerings.
The Montreal-based company primarily makes simulators and other equipment used to train commercial airline pilots as well as military personnel around the world.
The company also announced ahead of its annual shareholders meeting in Montreal that its dividend will rise by seven per cent to 7.5 cents quarterly, beginning in September.