Eclipse Cuts Workforce 38 Percent

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Eclipse Aviation is laying off about 650 (of 1,800) employees as part of what acting CEO Roel Pieper is calling the company's "operational excellence strategy." The layoffs affect 38 percent of the workforce and will hit employees, including temps and those who have been working less than six months, at facilities in Albuquerque, Gainseville, Fla., and Albany, N.Y., Eclipse said in a statement. The result will be a production slowdown of its EA500 very light jet for the rest of the year (by how much, the statement does not say) followed by a ramp-up to "previous levels and higher" in 2009. "Financial stability is critical for this company and unfortunately, a reduction in workforce was necessary to achieve it," Pieper said. "I am confident this action will set the company on the path to profitability so that we can continue to lead the very light jet category."

Rumors started circulating about a shakeup at Eclipse about two weeks ago and the company was uncharacteristically circumspect about its future plans. It's also not interested in elaborating on the contents of the most recent statement and will not be releasing any further information or granting interviews. Meanwhile, the news will have a ripple effect through Eclipse's supplier base and the casualties are starting to be tallied. Hampson Aerospace in Grande Prairie, Tex., which makes the tail section of the aircraft, has only a skeleton crew left due to "an absence of demand" from Eclipse, which is that plant's only customer.