Boeing told employees Wednesday that almost 7,000 of them will receive layoff notices this week. With more than 5,500 voluntary buyouts added in, the company will slash almost 12,300 U.S. jobs in this first batch of cuts stemming from the coronavirus economic shock.
Washington state takes the biggest hit: 9,840 Boeing jobs will be cut before July 31 in a combination of buyouts and involuntary layoffs, the company said. “We have come to the unfortunate moment of having to start involuntary layoffs,” CEO Dave Calhoun said in a message to all employees. “We’re notifying the first 6,770 of our U.S. team members this week that they will be affected.”
Shares of Boeing, which had been lower earlier in the day, were up 1% immediately following the announcement. Calhoun said Wednesday that the company “will have to adjust our business plans constantly until the global pandemic stops whipsawing our markets in ways that are still hard to predict.”
But despite what Calhoun called “green shoots” — for example, some airlines recently reporting signs of improved travel bookings — it will not be a quick recovery, he said. “Our industry will come back, but it will take some years to return to what it was just two months ago,” he said.
The other major aircraft maker, Airbus, furloughed 6,000 staff in Europe in April. But it has yet to announce any permanent job cuts. Airlines around the world are also cutting jobs or making plans to do so. But US airlines are prohibited from making involuntary job cuts until October under terms of a US government bailout for the industry.
Many executives across the industry have warned their employees they will have much smaller operations in the future. But some, such as United CEO Scott Kirby, have expressed hope that it will not need involuntary layoffs.
Todd Horwitz Chief Strategist BubbaTrading.com
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