Boeing [BA] is sending involuntary layoff notifications to over 6,700 U.S. employees as the company plans to lower its total headcount by 10 percent due to the impact of the COVID-19 pandemic.
Company President and CEO David Calhoun sent a May 27 message to employees sharing the news that 6,770 employees would be laid off this week. The company will provide severance pay, COBRA health care coverage for U.S. employees and career transition services to those affected.
“The COVID-19 pandemic’s devastating impact on the airline industry means a deep cut in the number of commercial jets and services our customers will need over the next few years, which in turn means fewer jobs on our lines and in our offices,” Calhoun said. “We have done our very best to project the needs of our commercial airline customers over the next several years as they begin their path to recovery.”
The new layoffs are in addition to approximately 5,520 U.S. employees who have already voluntarily chosen layoffs, a Boeing spokesperson said in a Wednesday email to Defense Daily. While this week’s layoffs will not be the last for the company, they represent the largest segment of layoffs, the spokesperson said.
The company’s defense, space and related industry sectors have remained stable amid the more severe impact to Boeing’s commercial business. “We will continue hiring talent to support critical programs and meet our customers evolving needs,” the spokesperson said.
Less than 500 Boeing Defense, Space and Security (DSS) employees were included in the voluntary and involuntary layoffs, per a source close to the company.
Calhoun also highlighted the DSS team in his email, referencing the recent re-launch of the Space Force’s X-37B Orbital Test Vehicle as a company milestone. Boeing also plans to move forward with plans to restart 737 MAX production in Washington state, he noted.
“Green shoots” in the form of slowly increasing airline reservations as states begin to lift COVID-19-related travel restrictions also offer some hope, Calhoun said. However, it would take years for Boeing to recover from the impact of the coronavirus, he noted.