Boeing plans to institute a second round of voluntary layoffs in the company’s commercial airplanes division, services unit, and corporate operations, according to a memo reportedly sent to employees late Monday from CEO David Calhoun. The action will extend job cuts at the company beyond the 10 percent target cited by Calhoun in April. As of July, the company identified 19,000 positions as redundant.
“While we have seen signs of recovery from the pandemic, our industry and our customers continue to face significant challenges,” said Boeing in a written statement. “We have taken proactive steps to adjust to the market realities and position our company for the recovery. As we continue to assess our workforce and in response to employee feedback, we will be offering a second voluntary layoff (VLO) opportunity for employees to depart the company voluntarily with a pay and benefits package.”
So far the company has shed 6,000 jobs from various sites as part of a cost-cutting plan established in response to the Covid-19 pandemic and the resulting collapse in commercial aircraft demand worldwide.
In July the company said it would delay delivery of the 777X by roughly a year and again cut production rates of the 787 and 777 programs while studying the feasibility of consolidating Dreamliner production into one plant. Further plans call for ending production of the 747 in 2022, the company reported.
Last scheduled for first delivery in early 2021, the 777X will enter service in 2022 under the new schedule, while the combined production rate for the 777ER/777X falls from five to two per month next year. Boeing also has decided to cut production of the 787 from the current 10 per month to a total of six per month, either at its two Dreamliner plants in South Carolina and Washington state, respectively, or at a single factory, depending on the outcome of its consolidation studies.
The rate adjustment marks the second production cut this year. In April Boeing said it would cut 787 rates from 14 a month to seven in 2022 and 777/777X rates from five this year to three next year.