Boeing to cut 16,000 jobs after posting massive loss

Boeing said it will slash staff and production after posting a massive first-quarter loss. Demand for air travel has evaporated during the coronavirus outbreak, and the aerospace company continues to reel from the 737 Max grounding.

The company announced it would cut 10% of its jobs, about 16,000 positions, through a combination of buyouts, natural attrition and involuntary layoffs. The cuts will be deepest in Boeing's commercial airplane unit — which will lose about 15 per cent of jobs. And Boeing said it would drastically scale back production of two widebody passenger jets, the 787 Dreamliner and the 777.

"The demand for commercial airline travel has fallen off a cliff," said Boeing CEO Dave Calhoun, "The pandemic is also delivering a body blow to our business."

Calhoun said it is too soon to say how many involuntary layoffs will be needed, but that it is likely that there will be some. He said that the company has offered 70,000 of its employees a voluntary layoff package.

"That's a big number of offers," he said. "We are hoping we get a reasonably big number [of voluntary departures]."

The job cuts are expected to take place by the end of this year.

The company lost 1.7 billion US dollars from its core operations, a bit worse than Wall Street had expected. Boeing was hit by both by the 737 Max crisis as well as airlines canceling and delaying orders for new planes because of the pandemic. A temporary shutdown of its factories in Washington state because of health concerns cost the company 137 million dollars.

But it didn't shut production until the final week of the quarter. Boeing will incur additional costs from the temporary shutdown in its second-quarter results.

(Source: CNN)