Boeing, which entered the COVID-19 crisis on weak footing due to the ongoing 737 Max disaster, lost $2.4 billion in the second quarter and has cut production rates in a bid to reduce costs.
Boeing plans to offer a new round of buyout packages for employees, the second time the struggling planemaker has tried to cut its workforce through voluntary measures in 2020.
The “voluntary layoff” will be targeted primarily at workers in Boeing’s commercial division, according to Bloomberg, as well as its global services division and corporate offices. More details on the voluntary layoff packages will be released next week, Bloomberg reported, citing an internal email from CEO Dave Calhoun.
Boeing, along with European rival planemaker Airbus, has seen customer demand for new aircraft plummet as the coronavirus pandemic has swept around the globe. Cratering air travel demand had led airlines to ground parts of their fleets, defer new jet deliveries, and delay new orders. Boeing, which entered the crisis on weak footing due to the ongoing 737 Max disaster, lost $2.4 billion in the second quarter and has cut production rates in a bid to reduce costs.
The company also offered voluntary buyouts earlier this year, followed by involuntary layoffs in May, as the company sought to cut 10% of its workforce, or about 16,000 jobs. Those cuts also focused on the company’s commercial airplane sector, although other division were also included.
Boeing confirmed plans to conduct a second round of buyouts in a statement to Business Insider. “While we have seen signs of recovery from the pandemic, our industry and our customers continue to face significant challenges,” a spokesperson for the company said. “We have taken proactive steps to adjust to the market realities and position our company for the recovery.”
“This program aims to help reduce the size of our workforce through voluntary actions and, importantly, minimize future additional workforce actions,” the spokesperson added, saying Boeing had not set a specific target for the size of the reduction.
Even once-reliable parts of Boeing’s business have seen losses during the pandemic. Boeing’s Global Services division, which provides lucrative aftermarket services for airlines and other customers, posted a $672 million loss in the second quarter, a sharp reversal from the $687 million profit during the same quarter in 2019.
Global Services, which Bloomberg reported will be one of the divisions targeted by the voluntary layoff offers, provides maintenance, data analytics, supply chain resources, and other services to current and former customers. Demand for Global Services has fallen as airlines put less wear-and-tear on their planes due to reduced flying, and as they postpone capital expenditures.
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