The Boeing Company is poised to cut thousands of more jobs as it continues to hemorrhage money and lose revenue during a coronavirus pandemic that has crushed airline travel and demand for new aircraft.
Boeing’s CEO David Calhoun told employees in a memo on Wednesday that the aerospace giant expects to cut some 30,000 jobs by the end of next year – thousands more than initially planned – through a mix of buyouts, layoffs, and attrition.
The announcement falls on the same day that Boeing reported third-quarter losses that were not as bad as analysts were expecting and revenue that beat estimates.
But the results were nonetheless brutal. Boeing said it lost $466m in the third quarter- its fourth straight quarterly loss as its bottom line is hammered by this year’s pandemic and the ongoing worldwide grounding of the 737 MAX after two fatal crashes.
The COVID-19 pandemic has gutted global airline travel, pushing major airlines to the brink of bankruptcy and forcing them to seek government aid, slash costs and defer aircraft deliveries.
Boeing said it expects passenger travel to return to pre-pandemic levels in about three years.
The company recently lowered its forecast of demand for new planes over the next decade by 11 percent due to the pandemic. But some analysts think even that scaled-back forecast is too optimistic.
Boeing failed to record a single order for a new jetliner in September. In the first nine months of the year, it has delivered only 98 airline planes, compared with 301 during the same stretch of 2019. Aircraft makers get most of their cash from sales when planes are delivered.
The company continues to forecast that regulators will let it resume deliveries of new MAX jets before the year ends. Boeing has spent about two years overhauling flight-control software and computers on the plane after an automated anti-stall system pushed the noses down before crashes in Indonesia and Ethiopia that killed a total of 346 people in 2018 and 2019.
The company, which is based in Chicago in the United States and has aeroplane assembly plants near Seattle and in South Carolina, has borrowed billions of dollars in private credit to get through the downturn, although it bypassed federal pandemic-relief funds.
Boeing said that excluding non-repeating gains, it lost $1.39 per share. Analysts expected a loss of $2.33 per share, according to a survey by Zacks Investment Research. The revenue also beat expectations, with the Zacks survey pointing to sales of $13.81bn.