Struggling Eastern Air to Lay Off 3,500

Financially struggling Eastern Airlines said today that it is laying off 3,500 workers and warned that further cuts could follow unless labor costs are reduced.

The layoffs, which will begin Thursday and will be spread over the rest of the month, represent 9% of the carrier’s 38,000 employees.

Eastern, owned by Texas Air Corp., posted a $67.4-million loss in the third quarter of 1987, wiping out modest profits earlier in the year. The company has lost half a billion dollars in the last decade.

The cutbacks will “sharply reduce expenses to reduce losses,” the company said. But loss reductions will not be seen until the first quarter of 1988, it added.

The layoffs include 1,000 people in southern Florida, where Eastern is one of the largest private employers, and 700 in Atlanta, with the rest spread around the country.

The cutbacks, Eastern said, will affect “indirect support functions,” especially administration, but will include relatively smaller reductions for aircraft maintenance. Eastern was fined $9.5 million by the Federal Aviation Administration last year for sloppy maintenance records, and it has been the target of a slowdown by pilots complaining of current poor maintenance.