MIAMI – Due to low demand as a result of the COVID-19 pandemic, Boeing has decided to lay off 6,770 employees from its US workforce.
In the previous month, Boeing conducted voluntary layoffs as part of an effort to sustain the pandemic’s disastrous impact on the aviation and travel industries.
These layoffs are part of a plan announced at the start of May. Boeing CEO Dave Calhoun informed employees that 10% in workforce reductions would be necessary. The reductions would take the form of voluntary and involuntary layoffs, as well as turnovers.
The decision came after the company’s commercial customers cut demand by 15%. The cut represents around 16,000 jobs from a total of 160,000 Boeing employees.
At the time, as Boeing disclosed a massive first-quarter loss of about US$1.7b from its core operations, it cut staff and aircraft production, especially those of the 787 Dreamliner and the Boeing 777, due to the plunge in air demand.
Calhoun also said then that he did not know how many involuntary layoffs would take place, but the aerospace corporation offered 70,000 workers a voluntary layoff package.
From Voluntary to involuntary layoffs
Today, the 6,770 employees who are to be involuntarily laid off will be notified this week and will be supported by the company through severance pay, career transition services as well as COBRA health care coverage.
In a press release from Boeing CEO Dave Calhoun, he states that the COVID-19 pandemic’s devastating impact on the airline industry means “a deep cut in the number of commercial jets and services our customers will need over the next few years, which in turn means fewer jobs on our lines and in our offices.
“We have done our very best to project the needs of our commercial airline customers over the next several years as they begin their path to recovery.”
Calhoun also points out that there are still many challenges ahead for the travel industry. Although it is difficult to predict the future of the industry, Boeing will need to continue to make cuts and implement cost-saving measures.
CEO Dave Calhoun said in a note to employees, “Following the reduction-in-force announcement we made last month, we have concluded our voluntary layoff (VLO) program.”
“And now we have come to the unfortunate moment of having to start involuntary layoffs (ILO). We’re notifying the first 6,770 of our U.S. team members this week that they will be affected.”
According to the manufacturer, thousands of other employees will be laid off over the next few months and 5,520 other Boeing employees have been approved for voluntary separations.
“I wish there were some other way,” Calhoun said. “For those of you who are notified, I want to offer my personal gratitude for the contributions you have made to Boeing, and I wish you and your families the very best.”
The epidemic has driven down the demand for air travel, affecting Boeing’s airline and leasing clients. Airlines have announced losses not seen in years, and the outbreak has reduced the demand for new aircraft, a phenomenon that is impacting both Boeing and its main rival, European Airbus.
At the end of last month, Boeing raised $25 billion in its largest-ever debt sale to help it cope with the downturn, a sum that it claimed had allowed it to forgo federal aid.