Boeing to Slash 12,000 Jobs as Pandemic Hammers Demand

May 27, 2020 Updated: May 27, 2020

Boeing said Wednesday it was eliminating more than 12,000 U.S. jobs, including involuntary layoffs of 6,770 workers, as the iconic planemaker restructures in the face of the pandemic.

The company also disclosed it plans “several thousand remaining layoffs” in the next few months but did not say where those would take place.

Boeing Chief Executive Office Dave Calhoun said in a May 27 letter to employees. that jobs would also be cut at the company’s locations outside the United States. The world’s second-biggest plane manufacturer, after Airbus, employs over 150,000 people in over 65 countries.

“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,” Calhoun said.

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An employee works on a Boeing 737 Max aircraft at the Renton Municipal Airport in Renton, Washington on Jan. 10, 2020. (Lindsey Wasson/Reuters)

Restrictions on movement and border closures in response to the outbreak of the Chinese Communist Party (CCP) virus, the novel coronavirus that emerged from China late last year and causes the disease COVID-19, have hit the airline industry especially hard.

In an economic impact analysis (pdf), the International Civil Aviation Organization (ICAO), a UN agency, estimated a potential loss of between $244 billion and $420 billion in gross operating revenues for airlines in 2020. The agency said the pandemic has led to an overall reduction ranging from 33 percent to 60 percent of seats offered by airlines. It added that the outlook for the industry remains uncertain, with impacts depending on things like duration and magnitude of the outbreak, containment measures, the degree of consumer confidence for air travel, and overall economic conditions.

Calhoun, in his message, said Boeing would continue to respond to changes in business conditions.

“We also will have to adjust our business plans constantly until the global pandemic stops whipsawing our markets in ways that are still hard to predict,” he wrote.

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A Boeing 737 Max jets sit parked in Renton, Wash., Dec. 16, 2019. (Elaine Thompson/AP Photo)

He said Boeing was moving to cut costs as it faces a drop in airplane demand due to the pandemic, noting that its “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.”

“I wish there were some other way,” he said, referring to the job cuts, and added that “[f]or those staying on, enormous challenges remain,” chief among those ensuring that employees who recently returned to work stay safe.

Besides the involuntary layoffs, Boeing said Wednesday it had approved 5,520 U.S. employees to take voluntary layoffs and they will leave Boeing in the coming weeks.

Calhoun did note one encouraging development, saying, “we are seeing some green shoots” in the form of some Boeing customers reporting that reservations are outpacing cancellations on their flights for the first time since the outbreak.

Boeing shares rose 0.7 percent in mid-day trading to $145.76.

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