The commercial aircraft manufacturer confirmed plans to eliminate 4,550 positions by mid-2016 as part of a cost cutting program that could save the company as much as $1 billion, according to multiple media reports.
Boeing Co. plans to cut up to 8,000 jobs in its commercial airplanes division this year, according to multiple media reports.
The commercial aircraft manufacturer confirmed plans to eliminate 4,550 positions by mid-2016 as part of a cost cutting plan that could save the company as much as $1 billion. Boeing will eliminate 4,000 jobs in its commercial airplanes unit and another 550 in a flight and lab testing division by mid-2016.
The company told Reuters news service the reported figure of 8,000 jobs is “hypothetical” and that it does not have a specific goal for job cuts.
“There is no employment reduction target,” said spokesman Doug Alder. “The more we can control costs as a whole, the less impact there will be to employment.”
The 4,000 commercial airplanes job cuts will include about 1,600 voluntary layoffs and the other 2,400 will be achieved by leaving open positions unfilled, Alder said, adding that the company does not plan to institute any involuntary layoffs.
Slashing 8,000 jobs, including managers and executives, could save Boeing $1 billion in labor costs, said Peter Arment, analyst at Sterne Agee CRT, which could help the company remain competitive.
Despite relatively strong sales in a peaceful time, Boeing has been struggling to keep up with changing demand patterns. According to a story in the Wall Street Journal, investors are concerned a decline in the price of aircraft could take a bite out of Boeing’s profits.
Ray Conner, CEO of the company’s commercial unit, said last month during a company webcast airlines have been pressuring Boeing to offer less-expensive jetliners, and the company was being forced to give steep price cuts to win deals. Conner this month said Boeing was reorganizing its commercial unit by consolidating its older 747 and 767 jet programs.
“We need enough flexibility to win critical campaigns and still have enough margin to invest in new airplanes and services,” he said in an internal memo to employees last week.
According to the Reuters report, the numbers disclosed on Wednesday came as a surprise to the unions that represent Boeing’s workers as well.
“We have not been notified of these types of reduction numbers,” said Jon Holden, president of the International Association of Machinists District 751. The union said more than 1,000 members applied for voluntary layoffs.
Boeing’s other major union, the Society of Professional Engineering Employees in Aerospace, said some members had been told they might be eligible for buyouts, but none were approved.
Boeing job cuts could reach 8,000 this year
