In April Boeing announced its intentions to reduce its 160,000-strong workforce by 10%. Following the fourth consecutive quarterly loss, the company’s CEO, Dave Calhoun, announced that by the end of 2020 Boeing’s workforce will be reduced to 130,000, cutting job numbers by 14,000 more than anticipated.
“As we align to market realities, our business units and functions are carefully making staffing decisions to prioritize natural attrition and stability in order to limit the impact on our people and our company,” Calhoun said in a staff note. “We anticipate a workforce of about 130,000 employees by the end of 2021. Throughout this process, we will communicate with you every step of the way.”
The current struggles have resulted from two separate problems, the COVID-19 pandemic and the continued grounding of the MAX 737. The company reported negative free cash flow of US$5.08 billion, better than analysts’ estimates and an improvement on the previous quarter’s negative US$5.6 billion, according to FactSet. “While we’re still aiming to turn cash positive in late ’21, the recovery and the continued elevated virus cases make the path much more challenging,” said Boeing’s CFO, Greg Smith, on an earnings call. “Based on what we know today, it’s looking more likely that we will be cash flow positive in the 2022 timeframe.”
Boeing showed a net loss of US$466 million in the third quarter compared to a profit of US$1.2 billion in 2019. Sales generated US$14.1 billion, down 29% from a year ago but slightly ahead of analysts’ expectations for US$13.9 billion in revenue. Sales declines were heaviest in the commercial aircraft unit where revenue fell 56% from US$8.2 billion in the third quarter of 2019 to US$3.6 billion this year.
