Canada's transport giant Bombardier (TSE:BBD.B) is set to cut its global workforce by 7,000 over the next two years, it said, as it forecast lower revenues for 2016.
The world's largest aircraft and train maker said the 7,000 workers will include 2,000 contractors, and will be partially offset by hiring in certain growth areas, notably manufacturing its C Series commercial jets.
It has inked a letter of intent with Air Canada for up to 75 CS300 aircraft for as much as US3.8-billion, it said.
With this significant agreement, Bombardier has now received orders and commitments for a total of 678 C Series aircraft, it added.
In 2016, the group expects revenue of between US$16.5billion and US $17.5-billion, lower than the reported revenue of US$18.17billion in 2015.
Adjusted EPS for the year was down to US$0.14 compared to US$ 0.35 the year before.
For 2016, EBIT (earnings before interest and tax) is expected to be within a range of US$200 million to US$400 million, while free cash flow usage materially improves, at $1 billion to $1.3 billion for the year.
Meanwhile, in the fourth quarter the net loss narrowed to 31 cents per share compared to 92 cents per share a year earlier, on revenues which fell 15.8% to US$5.02bn.
"We are turning Bombardier around to make this great company stronger and more competitive," said Alain Bellemare, president and chief executive.
"Over the past year, we renewed our leadership team and developed a clear plan to significantly improve our performance. We de-risked major development programs and stabilized the company, securing our liquidity position and taking a series of actions to rebuild margins."
Shares added over 22% to stand at C$1.10.