Boeing cutting more than 12,000 US jobs, with thousands more planned

Boeing is set to announce significant US job cuts this week, according to a union spokesman who told Reuters about the layoffs on Tuesday.
A Boeing worker enters the Boeing Renton Factory, where 737 Max airliners are manufactured, in April 2020.
A Boeing worker enters the Boeing Renton Factory, where 737 Max airliners are manufactured, in April 2020.PHOTO: REUTERS

WASHINGTON (REUTERS) - Boeing said on Wednesday (May 27) it was eliminating more than 12,000 US jobs, including 6,770 involuntary layoffs, as the largest American planemaker restructures in the face of the coronavirus pandemic.

Boeing also disclosed it plans "several thousand remaining layoffs" in the next few months but did not say where those would take place.

The company announced in April it would cut 10 per cent of its worldwide workforce of 160,000 by the end of 2020.

Boeing said on Wednesday it had approved 5,520 US employees to take voluntary layoffs and they will leave Boeing in the coming weeks.

Boeing also disclosed it is notifying 6,770 workers this week of involuntary layoffs.

Boeing is moving to cut costs as it faces a drop in aeroplane demand from the coronavirus pandemic.

Boeing chief executive Dave Calhoun told employees in an email the "pandemic's devastating impact on the airline industry means a deep cut in the number of commercial jets and services our customers will need over the next few years, which in turn means fewer jobs on our lines and in our offices... I wish there were some other way."

Boeing shares rose 0.7 per cent in mid-day trading to US$145.76.

In April, Boeing recorded zero orders for the second time this year and customers canceled another 108 orders for its grounded 737 Max plane, compounding its worst start to a year since 1962.

The pandemic worsened a crisis for the company in which the 737 Max was grounded last year after the second of two fatal crashes.

Last month, Boeing raised US$25 billion (S$35 billion) in a bond offering that allowed the company avoid taking government aid.

The job cuts include more than 9,800 employees in Washington State. Boeing said on Wednesday the "several thousand remaining layoffs will come in additional tranches over the next few months."

Boeing said it expects to resume 737 Max deliveries in the third quarter following regulatory approvals, with production re-starting at low rates in the second quarter before gradually increasing to 31 per month during 2021.

"We're moving forward with our plan to restart 737 Max production in Renton, Washington," Calhoun said in his email.

Reuters reported in April 737 Max approval is not expected until at least August.