Boeing Co said Wednesday that it is cutting more than 12,000 jobs in the United States, including 6,770 involuntary layoffs, as the largest American planner restructures in the face of the coronavirus pandemic.
Boeing also said it expected “several thousand layoffs remaining” in the coming months, but did not say where it would take place.
Boeing is cutting costs as a sharp drop in demand for aircraft during the pandemic has exacerbated the company’s crisis, the 737 MAX of which was immobilized last year after a second fatal accident.
Boeing said it has restarted production of 737 MAX at a “low rate” at its factory in Renton, Washington. Reuters announced in April that MAX regulatory approval was not expected until at least August.
Boeing shares closed 3.3% higher at $ 149.52 and then rose 4.6% to $ 155.84 after hours of news of the restart in MAX production.
The company announced in April that it would cut 10% of its global workforce by 160,000 by the end of 2020. Boeing announced on Wednesday that 5,520 US employees would take on voluntary layoffs, and also revealed that it was notifying 6,770 workers in involuntary dismissals.
CEO Dave Calhoun told employees in an email that “the devastating impact of the pandemic on the airline industry means a dramatic reduction in the number of commercial aircraft 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 was another way. “
CFRA analyst Colin Scarola upgraded Boeing to buy and raised its price target to $ 174 from $ 112, saying Boeing “can overcome its current crises and grow in the long term”.
Boeing recorded no orders for the second time this year in April, and customers canceled 108 other orders for 737 MAX, further compounding its worst start to the year since 1962.
Last month, Boeing raised $ 25 billion in a bond issue that allowed it to avoid taking government assistance.
The layoffs include more than 9,800 employees in Washington State. Boeing said that “several thousand remaining layoffs will come in additional installments over the next few months”.
Boeing said it plans to resume deliveries of 737 MAX in the third quarter after regulatory approvals before gradually increasing to 31 per month in 2021.
The aerospace industry has been hit hard, including many Boeing suppliers.
General Electric Co announced this month its intention to reduce its aeronautical unit’s global workforce by 25% this year, to up to 13,000 jobs. SpiritAero Systems Holdings announced the loss of an additional 1,450 jobs in Kansas.
(With the exception of the title, this story was not edited by GalacticGaming staff and is published from a syndicated feed.)
