American plane maker, Boeing, is set to implement job cuts in the U.S. after previously announcing that it will lay off 10% of its worldwide workforce of 160,000 employees.
According to the company’s Chief Executive Officer, Dave Calhoun, the job cuts will be undertaken through a combination of voluntary layoffs, natural turnover, and involuntary layoffs, reiterating that the most affected will be areas that are most exposed to commercial customers i.e., commercial airplanes, services businesses, and corporate functions.
Society of Professional Engineering Employees in Aerospace (SPEEA), a union that represents 17,600 Boeing employees, reports that about 1,300 of its members have applied to take voluntary layoffs.
Boeing’s problems began in 2019 after two of its 737 Max aircraft crashed and killed everyone on board. This was then followed by a worldwide grounding of the craft, with no airline yet to lift the ban. Additionally, in December last year, the airline announced it would cease production of the crafts with effect from January 2020.
At the end of last year, the planemaker lost its top spot in plane deliveries to rivals Airbus, managing only 345 deliveries against Airbus’ 863.
In April, Boeing recorded zero orders for the second time this year, and customers canceled another 108 orders for its grounded 737 MAX plane, compounding its worst start to a year since 1962. It also received zero plane orders for January 2020.
Its long time nemesis, Airbus, also hinted at possible job cuts in April, after implementing government-assisted furlough schemes starting with about 3,000 workers in France. The firm is also planning to cut aircraft production by one third. This is because travel restrictions have forced most airlines to ground their fleet, thus placing no new orders. Henceforth, instead of the company producing more than 60 of the Airbus A320 model each month, it will produce only 40 while also reducing A350 rates to 6.