CHICAGO — Effective May 4, Gogo (Nasdaq: GOGO) will furlough approximately 60 percent of its workforce and reduce compensation for most other employees as part of a broad-based cost reduction plan due to the impact of COVID-19. Chicago-based Gogo is an in-flight internet company. The furloughs will impact more than 600 employees. The time and duration of the furloughs will vary based on workload. Salary reductions will begin at 30 percent for the CEO, 20 percent for the executive leadership team and feather down from there. Members of Gogo’s board of directors has 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 has declined 95 percent this month compared with the prior year. The remaining 40 percent of Gogo’s revenue comes from its business aviation segment, which has experienced a sharp decrease in flight activity.
Gogo has also applied for an $81 million grant and a $150 million loan under the CARES Act. If Gogo receives government assistance, it will modify the personnel actions. Previous measures Gogo implemented to cut costs included a hiring freeze, suspension of 2020 merit salary increases and deferral of the CEO’s 2019 bonus. The company’s headquarters are located at 111 N. Canal St. in Chicago.