Boeing co. made a survival plan that included several layoffs. The famous plane maker is on the verge of declaring thousands of job cuts owing to the huge amount of losses the company has incurred due to the pandemic.It employed 161,000 workers in January 1.
The coronavirus pandemic is having disastrous impacts on the businesses all over the world, especially the travel and tourism industry. The impact of the virus shall be felt deeply by the airline sector. The Cheif Executive officer of the giant company, David Coulhan told the investors that “We will be a small company for a while.” This was when Boeing reported its second consecutive quarterly loss.
Boeing has been weighing production cuts and layoffs with a recent layout plan of cutting its workforce by around 10%. The is now expected to shed about 1 in 10 positions. It also said that most of the layoffs would be from its commercial Airplane and service arms. Mr. Calhoun spoke that Boeing wouldn’t know how much many employees would accept the buyout packages. He assured that they are also weighing furloughs, primarily in its business that provides services to airlines.
After burning through $4.7 Billion in cash during the first quarter, David Calhoun says that it could take two to three years for the air travel industry to return to its pre-pandemic state, in an address to the shareholders.
Domestic markets are expected to comeback to normal pathways faster than the international flights. Lower plane deliveries and sales of spares along with temporary factory closures and the continuing impact of 737 MAX crisis, led to a loss of $641 million for the Chicago based company’s first quarter. Sales fell to $16.9 billion from $22.9 billion a year earlier. It was the first time that the company incurred losses after turning a profit for more than 40 straight quarters. Last week, it also announced the termination if its $4.2 billion deal with Brazilian regional aircraft market Embraer to form a joint venture that would be 80% owned by Boeing.