By Doug Cameron 

Boeing Co. announced plans Wednesday to shed more than 13,000 employees, including the first round of compulsory cuts as part of previously announced plans triggered by the coronavirus-driven collapse in global air travel.

The initial tranche of cuts is far larger than indicated on Tuesday by union officials. The aerospace giant said the layoff notices delivered this week will be the largest part of plans announced last month to shed around 10% of its 160,000-strong global workforce this year as it reduces jetliner production in response to airlines' inability and unwillingness to take new aircraft following huge declines in passenger traffic.

Boeing announced around 6,770 involuntary layoffs among U.S. employees, while another 5,520 had been approved for voluntary severance packages and will leave over the next few weeks.

The company said it had completed its voluntary-layoff program after offering staff buyouts last month, with several thousand more jobs set to go under compulsory cuts over the next several months. They mark the first major reductions by the company since 2017, when it laid off around 1,500 workers as part of a wider cost-cutting drive.

Boeing said the latest cuts are focused on its commercial jetliner business, but didn't provide details on the units or locations affected. Union officials said the cuts are focused on Seattle-area aircraft-assembly operations. Boeing is also expected to cut jobs at its rapidly growing services arm as airlines reduce spending on aircraft parts, as well as at its central corporate offices, executives said last month.

Boeing is halving output of its 787 twin-aisle jet and plans to resume limited production of its 737 MAX jetliner this quarter, having halted output in January as it awaited regulatory clearance for the plane to fly again following two fatal crashes.

A number of suppliers to Boeing's airplane factories near Seattle have already announced job cuts, according to state employment records.

Rival Airbus SE has embarked on its own wide-ranging cost-reduction effort, cutting jetliner production initially by one-third. General Electric Co., which makes engines and other parts for both plane makers, also is cutting thousands of jobs.

Around 1,300 members of the Society of Professional Engineering Employees in Aerospace, Boeing's main engineering union, applied for the company's voluntary layoff package and were accepted, a union official said Tuesday. The International Association of Machinists and Aerospace Workers said around 1,200 of its members at Boeing accepted voluntary layoffs.

The engineering union said the company rejected some applications to take voluntary buyouts from staff working on defense programs or with other critical skills.

The KC-46A refueling tanker and P-8 naval surveillance jet, both based on commercial jetliners, are key sources of cash for Boeing because of the drop in deliveries to airlines.

Write to Doug Cameron at doug.cameron@wsj.com

 

(END) Dow Jones Newswires

May 27, 2020 13:04 ET (17:04 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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