Berkshire Hathaway Inc on Saturday announced a $9.8 billion writedown and 10,000 job losses at its Precision Castparts aircraft and industrial partsbusiness, as the coronavirus pandemic caused widespread pain for Warren Buffett’s conglomerate.
Berkshire, which acquired Precision for $32.1 billion in 2016 in its largest acquisition, said COVID-19 caused airlines to slash aircraft orders, resulting in significantly less demand for Precision’s products and revenue to fall by about one-third.
Read more: Coronavirus: Buffett’s Berkshire Hathaway sells entire stakes in top US airlines
It also said results may continue suffering as the unit undertakes an “aggressive restructuring” to shrink operations to meet lowered demand. Precision ended 2019 with 33,417 employees, meaning it has since shed 30 percent of its workforce.
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Precision was not the only drag on Berkshire, which said the pandemic has caused “relatively minor to severe” damage to most of its more than 90 operating businesses, which include the BNSF railroad, Geico auto insurer and See’s candies.
Berkshire said it also took a $513 million charge on its 26.6 percent stake in Kraft Heinz Co, which on July 30 took writedowns on several of its businesses, including its Maxwell House and Oscar Mayer brands.
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The charges cut into Berkshire’s bottom line, though the Omaha, Nebraska-based conglomerate nevertheless posted an 87 percent increase in second-quarter net income because of unrealized gains in its common stock investments such as Apple Inc.
Berkshire said it repurchased $5.1 billion of stock in the quarter, a record for the company, and confirming its hint in a July 8 regulatory filing that it had become more aggressive with buybacks after loosening its buyback policy in 2018.
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