Boeing, the aircraft maker which previously laid off 16,000 employees, is going for more job cuts.
Boeing is facing hundreds of cancellations in orders as airlines are having low travel demand due to the pandemic. In April, Boeing cut jobs by 10% globally out of its 160,000 employees.
“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 employees Monday. He said the new layoffs will start 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 with our new reality.”
The Pandemic Effect
However, the pandemic has not been very kind to Boeing; the economic chaos and downsizing are resulting in dull colors. Subsequently, the company will slow down production and discontinue a few models that may seem unnecessary after the whole COVID-19 affair. Boeing also has plans to consolidate production for 787 Dreamliner from multiple stations to a single factory.
The recent layoffs announced in April will target the commercial unit. However, buyouts will be offered to workers in corporate offices, aircraft services, and commercial units.
The year of the pandemic made 5,500 Boeing employees take the buyout package and leave willingly. Later in May, the company laid off 6,800 employees. The company has a target to hit 16,000 and this will definitely take a toll on its long term production plans.
Boeing Losing Deliveries
The Boeing Company’s commercial business is facing issues. The company is having low demand for its commercial jets.
It has done even lesser deliveries in May from April and has grounded its 737 MAX planes.
In May, Boeing deliveries dropped to only four planes, which is lower than six deliveries, which it did in April.
In six decades this is the company’s lowest total number of deliveries. However, it is 87% fewer deliveries to customers at the same time a year ago.
Airlines pay the majority of the purchase price after receiving the plane. Therefore, deliveries are financially important to plane makers.
The company resumed its operations last week. Moreover, it plans to make deliveries for the MAX in the third quarter.