Boeing Slashes Over 12,000 Jobs, With More Cuts Coming

27 May 2020 by Nicholas Reimann

TOPLINE

Boeing announced Wednesday that the company is cutting over 12,000 jobs—most of those in the Seattle area—as the beleaguered air manufacturer deals with the fallout of the coronavirus pandemic that’s at times seen air travel drop over 90% compared to 2019.

https://specials-images.forbesimg.com/imageserve/1211361946/960x0.jpg?fit=scale — RENTON, WA - APRIL 29: The factory where Boeing manufactures is 737 MAX airplane is shown on April ... [+] 29, 2020 in Renton, Washington. Boeing announced during an earnings call today that it would lay off 15 percent of its commercial-airplanes division workforce amid the fallout from the coronavirus pandemic. (Photo by Stephen Brashear/Getty Images)Getty Images

KEY FACTS

The company plans to lay off 6,770 U.S. workers this week, with another 5,520 workers being asked to take buyouts in coming weeks.

The cuts come after Boeing already announced plans that it would lay off around 10% of its workforce, which would mean cutting about 16,000 jobs of the total 160,000-person workforce.

Additional cuts are coming, a Boeing spokesperson told the Associated Press, with thousands of more jobs to be cut in the coming months.

This round of layoffs will be concentrated in Seattle, the home of the company’s commercial airplane campus, with The Seattle Times reporting nearly 10,000 of the job cuts will be from Washington state.

Those jobs will officially be cut before July 31, according to The Seattle Times.

The cuts were largely attributed to decline in demand for commercial air travel, with Boeing CEO Dave Calhoun saying in a message to employees that the defense and space side of Boeing’s business remains strong.

KEY BACKGROUND

Boeing had been on a downward trajectory even before the coronavirus pandemic after two of its 737 MAX aircraft were involved in deadly crashes, leading President Donald Trump ground the 737 MAX jets in March of 2019. The company’s share price has taken a tumble since the jet crashes, dropping from trading above $400 in March of 2019 to around $95 on March 20 of this year.

Calhoun said the company plans to recertify its 737 MAX aircraft, with modified flight control systems, and get them back into service at some point later this year.

Boeing is not alone in making deep cuts as the entire airline industry grapples with lost revenue. United Airlines, for example, has said it plans to cut 30% of its management positions.

CRITICAL QUOTE

“We have come to the unfortunate moment of having to start involuntary layoffs,” Calhoun said to employees, adding “I wish there were some other way.”

WHAT WE DON’T KNOW