Effective May 4, in-flight WiFi provider Gogo (NASDAQ: GOGO), furloughed approximately 60 percent of its workforce and reduced compensation for most other employees as part of a broad-based cost reduction plan due to the impact of COVID-19. The furloughs impact more than 600 employees across all three of Gogo’s business segments. The time and duration of those furloughs will vary based on workload in individual departments, according to the company.
Salary reductions began at 30 percent for the CEO, then 20 percent for the executive leadership team, and further down from there. Gogo’s Board of Directors also agreed to reduce their compensation by 30 percent. Certain types of employees, such as hourly workers, will not have their compensation reduced.
Approximately 60 percent of Gogo’s revenue comes from its two commercial airline segments. Passenger traffic on commercial airlines using Gogo’s service declined 95 percent in April compared to the prior year, resulting in a projected 60-70 percent reduction in sales for the month. The remaining 40 percent of Gogo’s revenue comes from its business aviation segment which has seen a sharp decrease in flight activity.
“The health and safety of our employees and customers is our first and most important priority, but the long-term health of our business is also a critical focus area,” said Gogo President/CEO Oakleigh Thorne. “In March, we announced 16 levers that we can employ to dramatically lower our costs in order to ensure our long-term viability, and we believe we are implementing the appropriate measures to accomplish that goal.”
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