Boeing to cut staff by 10% amid coronavirus pandemic2 min read . Updated: 29 Apr 2020, 05:33 PM IST
- Boeing made the announcement as it reported a loss of $641 million in the first quarter
- Boeing has about 160,000 employees worldwide
WASHINGTON : Boeing Co CEO Dave Calhoun told employees on Wednesday that the largest US planemaker is reducing the size of its workforce by about 10% amid a steep fall in travel demand due to the coronavirus pandemic.
"We have begun taking action to lower our number of employees by roughly 10% through a combination of voluntary layoffs, natural turnover and involuntary layoffs as necessary," Calhoun said in an email seen by Reuters.
Boeing will need to make "even deeper reductions in areas that are most exposed to the condition of our commercial customers — more than 15% across our commercial airplanes and services businesses, as well as our corporate functions," he said.
Boeing Co. said Wednesday it has started to shrink through employees volunteering to leave, attrition and “layoffs as necessary."
The company began the year with about 161,000 employees.
Boeing made the announcement as it reported a loss of $641 million in the first quarter. It earned $2.15 billion in the same period last year.
Revenue fell 26%, to $16.91 billion.
The job cuts will be more than 15% in the company’s large division that makes planes for airlines and also in services. Boeing’ defense and space unit will likely see the fewest jobs eliminated.
In a memo to employees, CEO David Calhoun said Boeing will reduce production of its large 787 and 777 jets and slowly resume production of the grounded 737 Max.
Earlier this week, Calhoun said it will take years for the aircraft-building business to return to its pre-pandemic levels.
Boeing was in financial trouble crisis before the virus outbreak. The grounding of its best-selling jet, the 737 Max, after two crashes that killed 346 people cut deeply into revenue last year, leading to Boeing’s first money-losing year in two decades. The company faces criminal and civil investigations and a flurry of lawsuits by families of the people killed in the crashes.
The virus outbreak has added to Boeing’s troubles by causing airlines to delay purchases of new jets. Globally, airlines have parked about 2,800 planes and don’t need new ones immediately. Some have canceled orders for the Max.
In addition, Boeing temporarily shut down assembly lines in Washington state and South Carolina after workers tested positive for the virus. The Seattle-area plants are beginning to resume activity, and workers are scheduled to return to the South Carolina plant beginning Sunday night.
Boeing has about 160,000 employees worldwide.