Boeing to cut jobs in response to coronavirus crisis
New York (CNN Business)Boeing is planning another round of job cuts on top of the 16,000 positions it previously announced it would eliminate.
The aircraft maker has been hit by hundreds of canceled orders as airlines struggle with a plunge in demand for air travel during the Covid-19 pandemic. Boeing said in April it planned to cut 10% of its global staff of 160,000 employees in response.
“The pandemic has been tough on our people, our business and our industry. While there have been some signs of recovery, the reality is we’re in a challenging position,” said CEO Dave Calhoun in a message to Boeing (BA) employees Monday. He said there would be a new round of buyouts offered to employees next week.
“This action will extend our overall workforce reductions beyond the initial 10% target and will allow more employees who want to depart the company to do so voluntarily with a pay and benefits package,” Calhoun said. “Importantly, it also will help limit additional involuntary workforce actions. I truly wish the current market demand could support the size of our workforce. Unfortunately, layoffs are a hard but necessary step to align to our new reality.”
Last month, Boeing said it would produce planes at a slower rate than previously expected for years to come. It has announced it will stop building the 747 when current orders for a freighter version of the plane run out in 2022. It is considering whether to consolidate production of the 787 Dreamliner, now built at factories in both Washington state and South Carolina, at one facility or the other.
The cuts announced in April target mostly Boeing’s commercial aircraft unit. The latest round of buyouts will be offered to employees there, and also to workers in corporate offices and aircraft services.
Earlier this year 5,500 Boeing employees agreed to take buyout packages and leave the company voluntarily. The company then laid off another 6,800 in May. But even as it prepared for additional cuts to hit the 16,000 target, the long-term production plans changed for the worse.
It also has yet to be granted approval of the 737 Max to carry passengers once again. The plane has been grounded, and deliveries halted, since March of 2019 following two fatal crashes that killed 346 people.
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