Honeywell International (HON) is cutting jobs in its aerospace division.
"We are implementing a small reduction of positions in certain areas of aerospace this year to better align our costs with current demand and best position the business for the long term," Steven Brecken, director of global media and analyst relations, told Real Money in a phone interview Tuesday.
Brecken said Honeywell will prioritize attrition and voluntary departures, offering job placement services, related compensation and benefits where application. The number of positions to be cut has not been disclosed.
The layoffs are expected to happen quickly. An internal memo from CEO Tim Mahoney that was leaked to MishTalk says employees interested in being selected for this reduction should send an email to their human resources contact by close of business on July 29.
Despite these layoffs, Brecken said, "We are confident in the long-term growth of our business of our aerospace business." But this follows reports that Honeywell already laid off approximately 1,000 workers at the end of 2015.
This is the latest blow for the aerospace industry. Boeing (BA) recently cut 4,500 workers by the end of June, according to a Wall Street Journal report. The company also reduced its approximately 5,700-position flight testing unit by about 10%, the Journal reported. Boeing had been losing market share to Airbus Group SE (EADSY) .
Mohr said Honeywell needs production to fulfill existing backlog of orders as quickly as possible, which will only serve to fulfill delivery, not book new orders.
"If history is any indication, the short-term backlog surplus is likely to spiral into a deficit pretty quickly barring a sudden reversal in bookings. Weak pricing on any new bookings shrouds the outlook even further. Full circle cyclicality," Mohr said.
The aerospace industry has seen a recent downturn. Analysts at Canaccord wrote in a research note Tuesday that at the Farnborough air show in England, Airbus and Boeing achieved combined orders totaling $62 billion, nearly half of the 2014 total. The analysts added that they were "unsurprised to see lower orders given the current record backlogs." Nevertheless, the Cannacord analysts said Airbus and Boeing's 20-year outlook remains positive.
That being said, the aerospace industry continues to see cuts in the immediate future.
-- This has been updated with additional quotes from Jack Mohr.