Boeing slashes 12,000 jobs as virus seizes travel industry
Boeing is cutting more than 12,000 jobs through layoffs and buyouts as the coronavirus pandemic seizes the travel industry. And the aircraft maker says more cuts are coming.
One of the US's biggest manufacturers said on Wednesday (US time) that it will lay off 6770 employees this week, and another 5520 workers are taking buyout offers to leave voluntarily in the coming weeks.
Boeing had said it would cut 10 per cent of a workforce that numbered about 160,000. A Boeing spokesperson said Wednesday's actions represent the largest number of job cuts, but several thousand additional jobs will be eliminated in the next few months.
The layoffs are expected to be concentrated in the Seattle area, home to Boeing's commercial-airplanes business. The company said additional job cuts will be made in international locations, but it did not provide numbers.
Boeing's defence and space division has remained relatively stable, helping offset the decline in air travel and demand for passenger jets.
Air travel within the US tumbled 96 per cent by mid-April, to fewer than 100,000 people on some days. It has recovered slightly. The Transportation Security Administration said it screened 264,843 people at airports on Tuesday, a drop of 89 per cent compared with the same Tuesday a year ago.
"The COVID-19 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," CEO David Calhoun said in a memo to employees.
Calhoun said the company faces the challenges of keeping employees safe and working with suppliers and airlines "to assure the travelling public that it can fly safe from infection."
Calhoun warned that Boeing will have to adjust business plans constantly because the pandemic makes it hard to predict the impact on the company's business.
Union representatives said they were still seeking details of the layoffs. About 1300 members of the Society of Professional Engineering Employees in Aerospace, which represents Boeing engineers, had been approved for severance packages, including one week of pay for every year of employment, up to 26, according to the union.
"This is an extremely tough time for anyone working in aerospace, and certainly at Boeing," said Bill Dugovich, a union spokesman. The union has been running webinars to explain Boeing's severance program and how to apply for unemployment, he said.
Boeing's crisis began with two crashes of its 737 Max, which killed 346 people and led regulators around the world to ground the jetliner last year. The company's problems have deepened with the coronavirus, which has cut global air traffic by up to 90 per cent and caused airlines to postpone or cancel orders and deliveries for new planes.
Boeing is a leading US exporter whose importance to the US economy has been highlighted by President Donald Trump. For many years, Boeing was the largest private employer in Washington state - even after the corporate headquarters moved from Seattle to Chicago in 2001 - and it continues to have an outsized impact on the state's economy.
Washington state was one of the first COVID-19 hot spots in the US and has suffered more than 1,000 deaths from the disease, according to numbers from Johns Hopkins University. Boeing temporarily shuttered jet-assembly plants in March after dozens of workers contracted the virus.
Boeing suppliers such as Spirit AeroSystems have already cut thousands of jobs.