Boeing cuts more than 12,000 US jobs, warns workers its not done

Boeing Co said Wednesday it was eliminating more than 12,000 jobs in the United States, including involuntary layoffs of 6,770 US workers. The wave of cuts are part of largest US planemaker efforts to restructure in the face of the coronavirus pandemic; the worst may be yet to come.

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

In April, the company announced it would cut 10 percent of its global workforce of 160,000 by the end of 2020. Boeing said Wednesday it had approved 5,520 US employees to take voluntary layoffs; they will leave Boeing in the coming weeks. Boeing also disclosed it is notifying 6,770 workers this week of involuntary layoffs.

Boeing is moving to cut costs as it faces a drop in aeroplane demand from the coronavirus pandemic.

Boeing Chief Executive Dave Calhoun told employees in an email the “pandemic’s 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.”

Boeing shares rose 0.7 percent in midday trading to $145.76. In April, Boeing recorded zero orders for the second time this year and customers cancelled another 108 orders for its grounded 737 MAX plane, compounding its worst start to a year since 1962.

The pandemic worsened a crisis for the company in which the 737 MAX was grounded last year after the second of two fatal crashes.

Last month, Boeing raised $25bn in a bond offering that allowed the company to avoid taking government aid.

The job cuts include more than 9,800 employees in Washington state. Boeing said Wednesday the “several thousand remaining layoffs will come in additional tranches over the next few months.”

Boeing said it expects to resume 737 MAX deliveries in the third quarter following regulatory approvals, with production restarting at low rates in the second quarter before gradually increasing to 31 a month during 2021.

“We’re moving forward with our plan to restart 737 MAX production in Renton, Washington,” Calhoun said in his email.

Reuters reported in April 737 MAX approval is not expected until at least August.