10% Workforce Cuts Under Consideration By Boeing

It has been revealed today that Boeing is mulling a cut to its workforce.  The US planemaker is said to be contemplating trimming around 10% of its staff, mainly from the Boeing Commercial Airplanes division. This could see the loss of as many as 16,000 jobs as the manufacturer looks to rein in costs amid the current coronavirus crisis.

Boeing Everett factory
Boeing could lay off 10% of its workforce. Photo: Boeing

10% of workforce could be laid off

US planemaker Boeing is reportedly mulling job cuts of around 10% as a result of the coronavirus outbreak, according to reports in the Wall Street Journal today. Demand for new planes has plummeted, and even the manufacturers confirmed orders have seen cancellations and deferrals, leaving it struggling to bring in revenue.

Previously, Boeing had shut down its Puget Sound area factories after a worker was alleged to have died following infection by the virus. This shutdown was then extended to other Boeing factories, including its 787 Dreamliner plant in South Carolina.

Boeing 737 MAX factory
16,000 jobs could be at risk. Photo: Boeing

Now, many Boeing employees could be fearful for their jobs, as the planemaker disclosed plans to trim its workforce by a tenth. According to Statista, it employs more than 161,000 workers across its operations. This means more than 16,000 jobs could be facing the ax.

One in four jobs at BCA could go

Reuters suggests that the majority of job losses will be focused on Boeing’s commercial arm, as this is the branch of the business most affected by the coronacrisis. Wikipedia lists just under 64,000 employees working in this sector, meaning that as many as one in four jobs at Boeing Commercial Airplanes (BCA) could be lost.

However, the company has not confirmed that this is definitely the plan, and told the Wall Street Journal that it was just one option that was under consideration. Should jobs be cut, the planemaker will look to buyouts and early retirements as well as involuntary layoffs to trim its workforce.

Boeing 787 factory
Boeing’s factories have been closed to prevent the spread of the virus. Photo: Boeing

In a letter to employees last week, Boeing’s CEO Dave Calhoun said,

“One thing is already clear: It will take time for the aerospace industry to recover from the crisis … “We are initiating a VLO plan that allows eligible employees who want to exit the company to do so with a pay and benefits package. This move aims to reduce the need for other workforce actions.”

The company had previously frozen new hiring and overtime pay in a bid to preserve cash.

More trouble for the US planemaker

Although Boeing purported to be in a strong position at the start of the year, its bank balance had to have taken a hit from the grounding of its most popular narrowbody plane. Previously selling in excess of 700 units a year, the 737 MAX total for 2019 was a negative balance of 93 planes. Already in 2020, the planemaker has removed 21 of the type from its order books.

boeing 737 MAX order cancelation getty images
Boeing is still unable to sell its popular narrowbody jet. Photo: Getty Images

Despite its best efforts, the 737 MAX is still yet to take its FAA test flights. With all the uncertainty in aviation and indeed the world right now, the new target date of May could indeed be pushed back again. And with Boeing now working on a new computer fix, its target for mid-year reentry to service is looking increasingly unrealistic.

With its bread and butter plane unable to be sold and an increasing number of orders being canceled or deferred, it’s unsurprising that the manufacturer is looking to trim its costs.