Boeing Co. is expected to announce job cuts in the United States this week after disclosing last month it planned to axe 10% of its global workforce of 160,000.
The Society of Professional Engineering Employees in Aerospace (SPEEA) union that represents roughly 17,600 Boeing employees was informed to expect layoff notices soon.
A Big Blow to Airline Business
Back in April, Boeing Chief Executive Dave Calhoun said the company had begun wielding the axe on its workforce through a combination of voluntary layoffs, involuntary layoffs, and natural turnover.
"The demand for commercial airline travel has fallen off a cliff," said Calhoun. "The pandemic is also delivering a body blow to our business."
The company’s voluntary layoff package has been offered to 70,000 employers so far.
"That's a big number of offers," he said. "We are hoping we get a reasonably big number [of voluntary departures]."
Boeing made a roadmap which involved making 15 percent reductions across its commercial airplanes and service businesses, as well as corporate functions.
According to the SPEAA, around 1,300 Boeing workers applied for voluntary layoffs.
Boeing told union leaders to expect cuts of between 15 to 20 percent of its membership, which represents technical workers and engineers in southern California and Washington State.
It shouldn’t come as a surprise that a renowned name in the airline industry has been rocked by the COVID-19 pandemic. In April, Boeing recorded zero sales for the second time this year. Its customers canceled 108 orders for its grounded 737 MAX plane. 2020 has proved to be Boeing’s worst year since it was founded in 1962.
COVID-19 Impact on Aviation Worsens
The airline industry faces an unprecedented crisis in the wake of the COVID-19 pandemic. According to the International Air Transport Association, the global airline industry will lose $252 billion in 2020.
It’s not just Boeing that has taken to cost-cutting measures. Most airlines are now cutting up to 90% of their daily flight capacity. On March 1, roughly two million Americans were flying per day. Today, it’s fewer than 100,000 people seen at the airports.
If this continues, the federal government bailout fund may only subside a portion of the losses airlines face in the coming months. More than 200 airlines have applied for the cash grants.
American Airlines will receive $5.8 billion, Southwest $3.2 billion, and Delta $5.4 billion among others. Another $4 billion will go for cargo airlines and $3 billion to assist contractors.
Not much has changes on the other side of the Atlantic. Global airline industry is now dependent on government handouts to keep themselves afloat.
Boeing will need some serious cash to get through the crisis. Its rival Airbus has also been hit by the COVID-19 effect as it faces canceled orders and postponed deliveries.
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