Boeing has announced to employees that it will start involuntary layoffs in the United States and that the first set of almost 7,000 job losses will be communicated this week. Combined with the voluntary buyouts already made, this amounts to nearly 12,300 job cuts. More may follow though, as Boeing has previously said 16,000 job cuts may be necessary.
Announcing cuts to employees
The latest job cuts were announced on May 27th in a message to all company employees. Boeing confirmed that it would now begin involuntary layoffs and that it would start to inform those affected this week.
CEO David Calhoun wrote in a communication to Boeing employees, seen by Simple Flying,
“We have come to the unfortunate moment of having to start involuntary layoffs. We’re notifying the first 6,770 of our US team members this week that they will be affected.”
Boeing has already announced 5,500 voluntary layoffs, and this now takes the total job losses in the US to around 12,300. According to reporting in The Seattle Times, this will hit Washington state worst, with 9,840 jobs cut there by July 31st.
Mr Calhoum stated that Boeing would support all those affected. It will provide severance pay, COBRA health care coverage, and career transition services. He also did not rule out further cuts at international locations. He wrote:
“Our international locations also are working through workforce reductions that will be communicated locally on their own timelines in accordance with local laws and benefit terms.”
Devasting the industry
The layoffs come amidst ongoing challenges and uncertainty during the coronavirus pandemic. With many airlines cutting costs and trying to ensure their survival, aircraft orders are suffering. Mr Calhoum explained this to employees:
“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.”
In looking forward, though, he did provide some reassurance that things may start to improve:
“We are seeing some green shoots. Some of our customers are reporting that reservations are outpacing cancellations on their flights for the first time since the pandemic started.”
Other manufacturers are suffering from similar problems. Engine manufacturer Rolls-Royce, for example, has announced up to 8,000 job cuts worldwide.
More job cuts to follow?
The around 12,300 cuts confirmed so far by Boeing may not be the end of it. In April, it was reported that Boeing was considering cutting around 10% of its staff. This could see total job losses of around 16,000.
As Simple Flying wrote in April, Boeing was already suffering before the pandemic hit. The ongoing problems with the 737 MAX had led to lost orders in 2019 and 2020. The coronavirus pandemic will no doubt affect this further, as outlined in Mr Calhoun’s appeal to the US government to support the sector.
Simple Flying contacted Boeing for comment on the job cuts announced but had not heard back by the time of publishing.