The job cuts will be deepest — more than 15% — in the large division that makes airline jets, which has assembly plants in the Seattle area and South Carolina. Deliveries of those planes have plummeted by two-thirds in 2020, compared with a year earlier. Boeing’s defense and space unit will likely see the fewest jobs eliminated.
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Boeing outlined plans Wednesday to cut 10% of its workforce, slow production of new planes and raise more cash to survive a downturn in business that started with the grounding of its best-selling jet and has accelerated with a deep slump in air travel caused by the coronavirus pandemic.
Executives said the job cuts would be accomplished through attrition, paying people to leave, and layoffs.
Boeing began the year with about 161,000 employees.
Boeing announced the moves as it reported a first-quarter loss of $641. It earned $2.15 billion in the same period last year. Revenue fell 26%, to $16.91 billion.
The job cuts will be deepest — more than 15% — in the large division that makes airline jets, which has assembly plants in the Seattle area and South Carolina. Deliveries of those planes have plummeted by two-thirds in 2020, compared with a year earlier. Boeing’s defense and space unit will likely see the fewest jobs eliminated.
“I know this news is a blow during an already challenging time,” CEO David Calhoun said in a memo to employees. “I regret the impact this will have on many of you. I sincerely wish there were some other way.”
Calhoun told reporters the job cuts would hit white-collar employees more than production workers, and would carry the company into 2022.
Boeing’s airline customers are staggering under an unprecedented decline in air travel because of the virus pandemic.
Global air travel fell 53% last month compared with March 2019, the largest drop in recent history and a return to levels not seen since 2006, the International Air Transport Association, an airline trade group, said Wednesday. Nearly two-thirds of the passenger jets around the world have been idled, according to aviation data firm Cirium.
Boeing’s European rival, Airbus, reported a first-quarter loss of 481 million euros ($515 million). Airbus recently decided to cut production of jetliners by about one-third, and CEO Guillaume Faury said Wednesday that the company – which has already furloughed more than 6,000 workers – will study further “resizing” when the post-pandemic size of the airline industry is more clear. That is a worrying prospect on a continent where Airbus has factories in four countries.
“We are still at an early stage of this crisis,” said Faury, who called it the gravest situation ever for the aerospace industry.