Boeing to cut 7,000 more jobs in jet market’s grim ‘new reality’
Boeing Co. is deepening job cuts as a global pandemic and prolonged grounding of the 737 Max jetliner squeeze the planemaker’s finances.
An additional 7,000 jobs are slated for elimination by the end of next year, bringing the total workforce reduction made through retirements, attrition and layoffs to 30,000 people, Boeing said in an email Wednesday after reporting earnings. The company had 160,000 employees at the start of the year before the coronavirus pandemic gutted air travel and jetliner sales.
“We’re aligning to this new reality by closely managing our liquidity and transforming our enterprise to be sharper, more resilient and more sustainable for the long term,” Chief Executive Officer Dave Calhoun said in a statement.
Once a prodigious cash generator, Boeing is now carefully monitoring its liquidity and soaring debt while navigating an unprecedented drop in air travel and working with regulators to lift the Max’s grounding. Boeing has burned through about $22 billion in free cash since March 2019, when regulators grounded its best-selling jet after two fatal accidents.
For Boeing, the focus is “cash, cash and cash,” George Ferguson, analyst with Bloomberg Intelligence, said in an interview before the results were announced. “We’ll all be focused on deliveries and comments on how many Maxes can they get out of inventory next year. Who’s telling them, Slow down’ or Speed up my plane.’”
Calhoun and Chief Financial Officer Greg Smith will discuss Boeing’s results in a conference call at 10:30 a.m. Eastern time. They are expected to provide more detail on when the company anticipates generating cash again.
Boeing fell 1% to $159.16 ahead of regular trading in New York. The shares tumbled 52% this year through Tuesday, the biggest decline among the 30 members of the Dow Jones Industrial Average.
Investors had braced for an “ugly” report after Boeing delivered just 28 jetliners in the third quarter, 55% fewer than a year earlier, Ken Herbert, an analyst with Canaccord Genuity, said in an interview before the earnings announcement.
Boeing reported an adjusted loss of of $1.39 a share, better than the average shortfall of $2.08 expected by analysts. Sales dropped 29% to $14.1 billion. Wall Street had predicted $13.8 billion.