Boeing announces 4,000 jobs to be cut by mid-year in Commercial Airplanes unit

Boeing has announced the Company’s intention to cut 4,000 jobs by mid-year in its Commercial Airplanes unit, stating that involuntary layoffs would be “only ….as a last resort.” Reductions are expected to include “hundreds of executives and managers” the company confirmed in an email statement, with the clear intention to achieve the job cuts “through attrition, leaving open positions unfilled and voluntary layoffs.”
Boeing have indicated that these cuts are part of their plan “to make fundamental changes for the long term to win in the market, fund our growth and operate as a healthy business,” making it clear: “That involves a combination of non-labor cost savings, supply chain savings, and reduced staffing levels. While there is no employment reduction target, the more we can control costs as a whole—the less impact there will be to employment.” However uncertainly surrounds whether these cuts will be sufficient for Boeing to reduce costs sufficiently, or if further cuts will follow.
Part of the problem necessitating such a reduction in the workforce was the announcement in January that production rates were being reduced in 2017 for the 777 from 8.3 to 7.0 aircraft per month and in September 2016 for the 747-8 from 1.3 to 0.5 aircraft per month. Though production rates for the 737 program are to be ramped up to 47 per month on 2017, 52 per month in 2018 and 57 per month in 2019, this is offset by the fact that the wide-body jets are priced at three to four times that of the narrow-body models.
While the company had previously warned investors that delivery numbers and revenue generated by commercial aircraft would drop year-over-year in 2016, Dennis Muilenburg, Boeing’s CEO said this would be a “temporary” situation.