Billionaire Branson’s Miserable Year Continues With 3000 Jobs Cut At Virgin Atlantic

Sir Richard Branson Virgin Atlantic

Virgin Atlantic is set to cut 3,150 jobs and end flights from London Gatwick as the rising cost of the coronavirus pandemic on the aviation industry takes its toll.

Shai Weiss, CEO, Virgin Atlantic said that the airline has “weathered many storms since our first flight 36 years ago, but none has been as devastating as Covid-19 and the associated loss of life and livelihood for so many.”

Virgin Atlantic has announced plans to “safeguard” its future “and emerge a sustainably profitable business” by reducing costs, preserving cash. Weiss adds, “It is crucial that we return to profitability in 2021. This will mean taking steps to reshape and resize Virgin Atlantic in line with demand … I wish it was not the case, but we will have to reduce the number of people we employ.”

Virgin Atlantic has announced the end of its operations from London Gatwick, and will focus on maintaining routes to its most popular destinations from London Heathrow and Manchester. Richard Branson owns 51% of Virgin Atlantic, and 10% of Virgin Australia.

Annus Horribilis, Branson

Of all the U.K.’s billionaires, the coronavirus pandemic has hit entrepreneur Sir Richard Branson hard, and his public statements have reflected the pressure under which his business empire has been placed.

In April, Branson responded to criticism over Virgin’s handling of the coronavirus crisis by  addressing “comments” on his “net worth,” and his request for government money to support Virgin Atlantic.

Having moved to protect the futures of his 70,000 employees announcing a $250 million rescue package at Virgin Atlantic, Branson again addressed whether his personal net worth should be used to save jobs

In an open letter, he wrote: “I’ve seen lots of comments about my net worth—but that is calculated on the value of Virgin businesses around the world before this crisis, not sitting as cash in a bank account ready to withdraw.

“Over the years significant profits have never been taken out of the Virgin Group, instead they have been reinvested in building businesses that create value and opportunities. The challenge right now is that there is no money coming in and lots going out.”

On claims that Branson does not pay U.K. income and capital gains tax on his investment success, Branson used the letter to claim that he “did not leave Britain for tax reasons but for our love of the beautiful British Virgin Islands” and was willing to use Necker Island as collateral against a government loan, “to save as many jobs as possible around the Group.”

Virgin Atlantic has today confirmed that they continue to explore “all available options to obtain additional external funding,” and remain in “constructive discussions” with the U.K. government for support

Aviation Disaster

Virgin Atlantic is one of a number of global airline companies forced to cut costs as the financial burden of the pandemic deepens into summer.

British Airways is reportedly planning to make up to 12,000 staff redundant, including 1,130 captains and first officers–26% of all pilots.

Jobs losses are reportedly likely at Scandinavian airline SAS, Germany’s Lufthansa and Norwegian Air Shuttle, according to the FT.

This week the BBC reported that airline engine maker Rolls-Royce could cut 8,000 jobs, while Airbus has reportedly cut its production by a third and furloughed 3,200 staff.