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March 25, 2020

UTC’s COVID-19 response includes hiring freeze, reduced spending

Photo | Contributed Raytheon Co. CEO Gregory Hayes.

Amid a major dip in air traffic due to the COVID-19 outbreak, United Technologies Corp. says it’s implemented several cost-cutting measures and a hiring freeze to address uncertainty in the financial markets.

UTC CEO and Chairman Gregory Hayes in a letter Tuesday informed workers that the Farmington-based conglomerate’s commercial aerospace business is being negatively impacted by the epidemic, forcing the company  to suspend all discretionary spending, including on engineering and development programs, in addition to significantly reducing its capital spending on buildings and facilities. The latter excludes safety-related improvements. 

Other measures include halting all new hiring and deferring annual merit increases for executives and salaried employees, he said.

Hayes, who had hoped to complete UTC’s pending $120-billion merger with Massachusetts defense giant Raytheon by April, said these actions are the first steps in what will “likely be a difficult journey.”

“These steps are difficult but necessary to protect UTC’s ability to weather this rapidly evolving crisis and are similar to the steps we took in past crises, representing a global shared sacrifice in the face of these challenging times,” he said.

UTC’s initial response to the coronavirus pandemic comes two weeks after its board of directors approved the spinoffs of Farmington-based Otis Elevator and Florida-based Carrier Corp.

As part of the spinoff, UTC shareholders will receive one share of Carrier common stock and half a share of Otis common stock for each share of UTC common stock they held on or before March 19, according to UTC.

When the Raytheon-UTC merger is complete, the combined companies will have their headquarters in Massachusetts, costing Connecticut a major corporate headquarters. 

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