Icelandair Lays Off More than 2,000 People

mbl.is/Eggert Jóhannesson

Vala Hafstað

Yesterday, Icelandair announced the layoffs of more than 2,000 out of its 3,400 employees by the end of the month, mbl.is reports. This is the largest mass layoff in Iceland’s history, Unnur Sverrisdóttir, director of the Directorate of Labor, tells mbl.is .

The company had already laid off 240 people a month ago. Most of the remaining 1,300 employees are working at a reduced employment ratio, while full-time employees have taken a pay cut. Last year, the company employed on average 4,715 people.

The layoffs affect all the airline’s divisions, but mainly those directly linked to production, such as crews, maintenance workers, and people working in ground operations. These include nearly 900 flight attendants and about 420 pilots.

Eggert Jóhannesson

Furthermore, the airline has implemented changes to its organizational structure. Its operations will from now on consist of seven divisions, and organizational changes have been made within each of the divisions and their departments, reducing the number of next level directors by 19.

The Icelandic government announced yesterday that companies having seen their revenue reduced by at least 75 percent and foreseeing losses through this year will be able to apply for state funding to cover part of employees’ three-month notice period. Therefore, Icelandair’s mass layoff is expected to cost the Icelandic State close to ISK 4 billion (USD 27 million; EUR 25 million) during the notice period.

A statement from Bogi Nils Bogason, president and CEO, posted on Icelandair Group’s website , reads:

“These measures are very painful yet necessary. We are facing considerable uncertainty for the unforeseeable future and preparing the Company for an uncertain period of limited operations. We hope to be able to scale up quickly as soon as markets start to recover and offer those affected employment again. Despite the significant reduction in our workforce, we are safeguarding necessary core operations and maintaining the flexibility and agility to respond quickly when demand starts to increase.”

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