LATAM fires over a third of its workforce
The largest South American airline,LATAM, has announced that due to the effects of COVID-19 pandemic over 2,700 of its workers are to be laid off.
The company’s announcement came on July 31, 2020, after a round of unsuccessful talks with its workers union. A chance of voluntary departure will be offered, and the forced layoffs will begin on August 5. They will include not only ground crew, but pilots and flight attendants as well.
According to the company, its pay was above average for the region, and reducing spending on wages is the only way to survive “the biggest public health crisis in history”.
LATAM’s year-to-year passenger traffic decrease surpassed 95% in both May and June 2020, and the company already registered over $2 billion net loss in Q1 2020, even before the full impact of the pandemic.
It has filed to reorganize under Chapter 11 bankruptcy protection in the United States on May 26, 2020, a move which has not affected its subsidiaries in Argentina, Brazil and Paraguay. However, these subsidiaries have also started to fall: LATAM Argentina ceased its operations in June, while LATAM Brazil filed for bankruptcy in early July 2020.
A 20% stake in LATAM is owned by Delta, an investment which pushed the US company even deeper into trouble.
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