IFE giants Panasonic and Thales implement layoffs in the United States

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The two largest inflight entertainment companies in the world, Panasonic Avionics and Thales InFlyt Experience, have implemented workforce reductions in the United States.

Panasonic Avionics cited headwinds created by the coronavirus pandemic as the driver behind job cuts and furloughs at its Lake Forest, California-based campus, while Thales InFlyt Experience said the layoffs – executed earlier this year in Florida – are part of a realignment strategy.

Neither company is providing the exact number of employees affected by the cuts. However, several Panasonic Avionics executives impacted by the measure have taken to LinkedIn to express their gratitude for the opportunities provided by the firm through the years.

A Panasonic spokesman yesterday told Runway Girl Network:

Panasonic Avionics has had to take several measures to control costs, and to preserve and protect its business given the sharp falloff in demand from our airline customers resulting from the COVID-19 pandemic. Regrettably, these measures include workforce reductions and furloughs.

Impacted employees are being or have been notified, and we are doing everything we can to support them and their families through this difficult time, including offering comprehensive severance and benefits packages, outplacement and employee assistance programs, where applicable.

For employees who remain, PAC has also begun to implement temporary reduced work schedules across its US and global operations. The company is also instituting salary reductions for all senior PAC executives, including its CEO.

While we have done everything possible to minimize the impact of this crisis on PAC employees, these latest actions were necessary given the pandemic’s extraordinary impact on our industry. We are hopeful that these measures will help PAC support its airline customers, limit its losses, and ensure the company is in a position of strength when the recovery begins.

Panasonic previously laid off some of its engineering staff in Orange County in the summer of 2019. David Bartlett departed the firm and his CTO position in January of this year.

Early last month, rumors began circling in the close-knit IFE world that job cuts at Thales InFlyt Experience – including at the former LiveTV unit acquired in 2014 by Thales – were large-scale in nature. But RGN now understands that the overall layoff round resulted in less than an 8% reduction in Florida. Thales InFlyt Experience has operations in both Melbourne and Orlando.

In a statement provided to RGN in March, the company said:

Given the competitive nature of the industry, we do not publicly discuss staffing plans nor do we take staffing changes lightly as our employees are of the utmost importance to our business. Our business will constantly evolve and flex to effectively respond to market and customer demands as such we must, and regularly do, review and evaluate our organizational needs ensuring that we have the appropriate skills and resources.

In Florida, the Thales InFlyt Experience business has maintained an employee population of more than 500 people and we intend to maintain a similar staff presence even after our business realignment strategy is complete.

It is important to note that as Thales InFlyt Experience continues to grow and evolve we are investing heavily in the digitalization of our products and in areas that create value for our customers.

The near idling of the commercial aviation fleet due to the coronavirus crisis not only affects the sale of IFE and connectivity hardware to airlines. It means that IFE hardware maintenance revenue – where companies like Panasonic and Thales usually thrive – is being pummeled.

Panasonic Avionics provides global maintenance services for its IFE and connectivity systems. Image: Panasonic Avionics

Other companies in the airline passenger experience sector are clearly not immune to the unprecedented issues facing aviation. Industry players of every size are tackling the challenges created by the coronavirus pandemic (and before that, the protracted Boeing 737 MAX grounding) with various cost-cutting measures. In addition to furloughs and workforce reductions, some are reaching out to their suppliers for payment reductions and extended terms to help them through the crisis.

Addressing the precipitous drop in passenger traffic and the knock-on effect to suppliers, in-seat power leader Astronics in a statement issued on 30 March said it has frozen hiring, suspended all wage adjustments and bonus programs, and is adjusting its work force “to align with demand”.

The broader Thales Group said in a 7 April statement said that its civil aeronautics businesses represent only around 12% of the Group’s turnover. “However, like all industrial companies, this crisis is currently seriously disrupting production chains and project execution.” A number of cost-cutting measures are now in play at the French multinational corporation, including a sharp reduction of temporary work, the implementation of exceptional government-supported temporary furloughs in the countries which provide for them, and a hiring freeze in support functions.

Safran Cabin, which in March temporarily suspended production at four North American plants, furloughed hundreds of employees amid the closures, the Seattle Times reported.

Even the Airline Passenger Experience Association (APEX), which represents these firms, is reviewing its costs. APEX president Juha Järvinen, who serves as Virgin Atlantic’s chief commercial officer, said: “As a responsible membership association, we are critically reviewing our cost base. Your Executive Committee and Board of Directors are actively reviewing revenue and expense projections. We have taken some prudent cost reduction steps as of this week and will continue to take needed actions to reduce risks, and secure the financial viability of APEX for years and decades ahead.”

Thales counts JetBlue as a customer for its IFE. Image: JetBlue

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