Boeing to cut 10% of workforce after reporting large losses

Boeing is cutting about 10% of its workforce to deal with a downturn in business that started with the grounding of its best-selling jet and has accelerated because of the coronavirus pandemic.

Boeing said it has started to shrink through employees volunteering to leave, attrition and “lay-offs as necessary”.

The company began the year with about 161,000 employees.

Boeing made the announcement as it reported a loss of 641 million dollars (£509m) in the first quarter. It earned 2.15 billion dollars (£1.71bn) in the same period last year.

Revenue fell 26% to 16.91 billion dollars (£13.4bn).

The job cuts will be more than 15% in the company’s large division that makes planes for airlines and also in services. Boeing’s defence and space unit will likely see the fewest jobs eliminated.

In a memo to employees, CEO David Calhoun said Boeing will reduce production of its large 787 and 777 jets and slowly resume production of the grounded 737 Max.

Earlier this week, Mr Calhoun said it will take years for the aircraft-building business to return to its pre-pandemic levels.

Virus Outbreak Boeing
Virus Outbreak Boeing

Boeing was in financial trouble before the virus outbreak.

The grounding of its best-selling jet, the 737 Max, after two crashes that killed 346 people cut deeply into revenue last year, leading to Boeing’s first money-losing year in two decades.

The company faces criminal and civil investigations and a flurry of lawsuits by families of the people killed in the crashes.

The virus outbreak has added to Boeing’s troubles by causing airlines to delay purchases of new jets. Globally, airlines have parked about 2,800 planes and do not need new ones immediately. Some have cancelled orders for the Max.

In addition, Boeing temporarily shut down assembly lines in Washington state and South Carolina after workers tested positive for the virus.

The Seattle-area plants are beginning to resume activity, and workers are scheduled to return to the South Carolina plant on Sunday night.