‘Hard but necessary’: Boeing offers employees second layoff plan

Boeing Co says it will offer employees a voluntary layoff package with pay and benefits for the second time this year, as the planemaker battles a coronavirus-induced slowdown in global air travel.

It will be offered to employees in the commercial aircraft and services businesses as well as corporate functions, Chief Executive Officer Dave Calhoun wrote in a note to employees, a copy of which was seen by the Reuters news agency.

“Unfortunately, layoffs are a hard but necessary step to align to our new reality, preserve liquidity and position ourselves for the eventual return to growth,” Calhoun said in the note.

“We anticipate seeing a significantly smaller marketplace over the next three years.”

The International Air Transport Association estimates the aviation industry will collectively lose $84.3bn this year, with 7.5 million flights cancelled between January and July.

The health crisis, which has hammered planemakers, airlines and suppliers, has added to Boeing’s woes. It has been grappling with a production freeze and the year-long grounding of the 737 MAX following two fatal crashes.

The company does not have a set target for the number of layoffs at this time and was encouraging all eligible employees interested in the voluntary package to apply, Boeing said in a statement.

The move to extend the overall reductions beyond the initial target of 10 percent of the workforce is in response to employee feedback, Calhoun said.

The planemaker had said in April it would cut its 160,000-person workforce by about 10 percent, with many of the job cuts to be completed by the end of this year at its commercial aircraft division.

More details will be made available to the employees beginning August 24, according to the CEO’s note.