Sikorsky Aircraft said Tuesday that it will lay off 160 full-time employees and 560 contractors at its facility in Coatesville because low oil prices have cut demand for its helicopters from oil and gas exploration companies.
The Coatesville facility is headquarters for the commercial division. About 80 percent of its products go to oil and gas companies or firms in related industries.
"Sustained decreases in oil prices continue to drive significant declines in capital investments by oil companies in offshore oil exploration projects impacting Sikorsky and resulting in reduced production levels," Sikorsky spokesman Paul Jackson said in a statement.
Layoffs of full-time employees will occur over the next 12 months, Jackson said. The contractors' agreements will not be renewed.
The layoffs will total 1,400 people, with the rest at Sikorsky facilities in Connecticut, where Sikorsky makes military helicopters, and in Poland. Sikorsky has also had some weakness in foreign military sales, Jackson said.
He said the Coatesville facility had about 1,060 full-time employees before the cuts were announced.
Sikorsky said it was vacating smaller satellite facilities and consolidating any necessary production at larger facilities in Poland and Connecticut. The company will close its plant in Bridgeport, Conn., moving some workers to its facility in Stratford, Conn.
Jackson added that none of the layoffs were a result of a facility closing.
Last year, Sikorsky received $2.5 million from Pennsylvania's Redevelopment Assistance Capital Program, which involves bond-funded, taxpayer-financed matching grants, to help the company tunnel under Washington Lane to connect its factory to a 12-acre expansion site by Chester County Airport.
"Yes, that is going forward," Jackson said, "because it is an infrastructure project and it will help mitigate the disruption of traffic around the Chester County Airport."
Sikorsky's foreign commercial sales might be hurt if Congress decides not to re-authorize the U.S. Export-Import Bank. According to the bank's 2014 annual report, Sikorsky's clients in Ireland and Brazil used more than $376 million in long-term loans from the bank to buy helicopters.
Sikorsky's parent, United Technologies, has said it plans to spin off or sell Sikorsky to concentrate on other divisions.
"There is no connection between the two," Jackson said of the layoffs and pending sale. "This is a reaction to a weak market."