Audio By Carbonatix
Boeing laid off 6,770 workers Wednesday, part of a plan to reduce 16,000 total jobs because of the rapid decrease in air travel during the Covid-19 pandemic.
"We have come to the unfortunate moment of having to start involuntary layoffs," CEO Dave Calhoun said in a message to employees Wednesday. "I wish there was some other way."
Before Wednesday's involuntary layoffs, 5,520 Boeing employees had accepted a voluntary buyout package, a Boeing spokesperson told CNN.
That brings job cuts at the company to more than 12,000 so far. Boeing had disclosed the 16,000-job reduction target last month. Additional rounds of layoffs are ahead "over the next few months," said the spokesman.
Boeing and rival Airbus have encountered widespread delays and cancellations in existing orders for planes as most of the planes around the globe have been grounded due to the sharp drop in air travel. Both aircraft makers have slashed production plans for at least the next few years.
The 16,000 jobs to be eliminated are equal to about 10% of Boeing's global staff, almost all of whom work in the United States. Almost all of the job cuts are coming from the commercial aircraft unit, rather than its defense or space operations.
Shares of Boeing which had been lower earlier in the day, were up 1% immediately following the announcement.
Calhoun said Wednesday that the company "will have to adjust our business plans constantly until the global pandemic stops whipsawing our markets in ways that are still hard to predict."
But despite what Calhoun called "green shoots" -- for example, some airlines recently reporting signs of improved travel bookings -- it will not be a quick recovery, he said.
"Our industry will come back, but it will take some years to return to what it was just two months ago," he said.
The other major aircraft maker, Airbus, furloughed 6,000 staff in Europe in April. But it has yet to announce any permanent job cuts.
Airlines around the world are also cutting jobs or making plans to do so. But US airlines are prohibited from making involuntary job cuts until October under terms of a US government bailout for the industry.
Many executives across the industry have warned their employees they will have much smaller operations in the future. But some, such as United (UAL) CEO Scott Kirby, have expressed hope that it won't need involuntary layoffs.
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