Boeing Co. BA -0.08% plans more job cuts in response to a pandemic-driven drop in jetliner demand it expects to continue for at least three years.
The aerospace giant told its employees in a memo late Monday that it is adding a second round of buyout offers, a move that would further reduce its workforce by an unspecified number beyond the cut of 19,000 already announced in July.
The company has increased the target set in April of cutting overall staff numbers by around 10%, according to the memo to staff from Chief Executive David Calhoun.
Further details are expected on Aug. 24, with the takeup of the buyout offer by staff reducing the number of compulsory job cuts required.
Boeing and rival Airbus SE are both wrestling with the future size and shape of the jetliner industry after a summer recovery in air travel faltered as coronavirus cases flared up again. Rising Covid-19 cases and new travel restrictions have nixed much of the nascent recovery in airline traffic, especially in the U.S., even as carriers cut fares and rolled out enhanced safety measures.
Boeing said in July that it is also weighing further changes to its manufacturing footprint, including the possible closure of one of the two assembly sites for its 787 Dreamliner.
More than 6,000 workers have already left the company, mostly at its commercial airplane operation in the Seattle area and units providing airlines with services such as parts and maintenance.
“I truly wish the current market demand could support the size of our workforce,” said Mr. Calhoun in the memo.
Boeing has cut production of the 787 and larger 777 jet, and is making only a handful of its 737 MAX aircraft as it awaits regulatory approval for that plane to resume commercial flying following two fatal accidents. Airlines and leasing companies continue to defer and cancel aircraft deals.
Boeing has raised billions of dollars in fresh debt in a move that executives said will help it through the crisis. It still hopes to start generating free cash again early next year and start repaying debt that analysts expect to top $60 billion.
More on the jetliner industry
- Aerospace Suppliers Brace for Hard Landing (Aug. 12)
- Heard on the Street: Airbus Can Deliver, Just Not Right Now (July 30)
- Boeing Plans Deeper Job, Production Cuts (July 29)
- At Boeing and Airbus, Finished Airplanes Pile Up (July 26)
Write to Doug Cameron at [email protected]
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