Boeing Delivery Center 800

Boeing to Offer More Employee Buyouts

Aug. 20, 2020
The jet-builder's second round of downsizing this will center on the Commercial Airplanes, Services, and corporate operations, and increase total layoffs beyond the 10% level set during Q2.

The Boeing Co. will implement a new round of downsizing later this month, this time centering on employee buyouts in the Commercial Airplanes, Services, and corporate operations, according to reports citing an internal memo from CEO Dave Calhoun. The plan is expected to be presented to the jet-builder's 145,000 workforce on August 24.

It will be the second round of layoffs this year for Boeing, which implemented a 10% workforce reduction during Q2.

“I truly wish the current market demand could support the size of our workforce,” Calhoun stated in the memo. “Unfortunately, layoffs are a hard but necessary step to align to our new reality, preserve liquidity and position ourselves for the eventual return to growth.”

Boeing's shares a problem with the rest of the commercial aerospace sector, which is struggling against weakening demand brought on by the Covid-19 pandemic. Airlines have scaled back operations as a result of reduced passenger volume, which has reduced the need for aircraft maintenance and updates. At the same time, airlines have canceled hundreds of orders for new aircraft, as a result of reduced forecasts for future demand.

Late last month Calhoun described how pandemic has altered the business climate and will result in further cuts in jobs and aircraft production. "The pandemic’s effect on our communities and industry is ongoing," he wrote in a message to manufacturer's 145,000 employees "and the challenges we face as a company are still unfolding."

For Boeing, the outlook is further complicated by the problem of returning its 737 MAX aircraft to service. The once-bestselling narrow-body jet series has been idled worldwide since March 2019, and Boeing has been hit with more than 400 cancellations of 737 MAX orders since the start of this year.

More positively for Boeing, a Polish charter airline, Enter Air ordered two 737-8 airplanes with options for two more jets — the first contracts placed for the 737 MAX during 2020.

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