Boeing to start cutting employees as it deals with coronavirus fallout
Boeing CEO David Calhoun sent out a letter to all 160,000 global employees, including the 70,000 it has in Washington, saying the company is starting a voluntary layoff plan.
It’s designed to trim the workforce and save cash as the company looks to weather the storm.
“We’re in uncharted waters,” Calhoun wrote in his letter to workers.
The program would allow eligible workers to walk away from the company with a pay and benefits package. What that package would look like and who would be eligible is still being figured out. Calhoun said that it would take three or four weeks for that information to come out.
A voluntary layoff plan also keeps Boeing on the positive side of a potential federal bailout. It wouldn’t look good if the company were to accept billions in taxpayer dollars after involuntary layoffs. Of course, we don’t know if Boeing is going to take the federal bailout, considering the company’s aversion to that option.
I want you to think about the global market Boeing is dealing with right now. Bloomberg reports that nearly 44% of commercial airplanes around the world are sitting in storage because airlines aren’t flying.
The company is already reeling from the 737 MAX shutdown, and many analysts are predicting 60% drops in the wide-body market over the next few years. That will hit the Dreamliner and the yet to be delivered 777X.
As Calhoun wrote, “it’s important we start adjusting to our new reality now.”