The aircraft maker announced it would cut 19,000 jobs earlier this year, combining involuntary and unplanned strikes. It said Wednesday it expects to cut about 130,000 jobs by the end of 2021, meaning another 7,000 jobs will be laid off, in addition to the company’s annual malnutrition. In August, the company warned employees that there would be more layoffs, as it proposed a new round of purchases.
Boeing did not immediately announce any layoffs. And it is not yet clear if this will be the end of the cut.
The company posted a loss of $ 754 million, excluding special items, last quarter as revenue fell $ 5.8 billion, or 29%. The airline has put the brakes on delivering new aircraft and is canceling orders due to a sharp drop in air travel caused by the epidemic. Boeing receives most of its revenue from aircraft sales at the time of delivery.
“Global outbreaks have continued to put pressure on our business this quarter, and we are adapting to this reality,” said CEO Dave Calhoun.
Calhoun predicts that global air traffic will not return to the level of 2019 for at least another three years, and that it will take years to catch up with the growth rate predicted before the outbreak. He said the impact of the epidemic on aircraft sales would last for years to come, adding that the forecast for the 10-year commercial aviation market for Boeing aircraft was 11% lower than last year.
“From a 20-year perspective, we are still seeing the effects of Covid, but on a smaller scale,” he said.
While Boeing’s third-quarter loss was narrower than the $ 3.3 billion and $ 1.7 billion in second-quarter and first-quarter losses, respectively, it is clear the company is under increasing pressure from the Covid-19 outbreak on the airline. It spent $ 4.8 billion in the quarter, double its cash in the second quarter.
Boeing has spent more than $ 37 billion on climate change. Despite increased cash burning, the company had $ 10.6 billion in cash on hand at the end of the quarter – $ 1.1 billion more than at the beginning of the year.
The company announced Wednesday that it will now use Boeing stock instead of cash to fund its contribution to the employee 401 (k) plan for predictable future, which is designed to save him $ 1 billion.
Earlier this month, Boeing decided to shut down production of the 787 Dreamliner at its Washington, D.C., federal plant and to assemble production at a non-federal plant in South Carolina beginning in 2021. It also plans to stop production of the 747, which is currently under construction. Only as a freight forwarder, in 2022.
Boeing is accelerating production of all its aircraft to meet declining demand for aircraft. The slower production rate is expected to reach $ 5 billion in increased costs for Boeing in 2020 and 2021.
In the good news, Boeing said it believes it will get approval from the emergency regulator for the 737 Max to carry another passenger. Calhoun says it should be able to start delivering another Max before the end of the year. Earlier this year, the company expected it to receive that approval by mid-2020.
But Calhoun says of the 450 million Max aircraft it built during the landing, the exact number does not need the original customer and they will have to identify the new customer. As a result, Boeing expects to ship only half of its aircraft by the end of 2021, and the other half by 2022.
The plane has been landing around the world since March 2019, after two crashes that killed 346 people. The landing has cost Boeing about $ 2 billion in customer compensation and increased production costs.
Correction: An earlier version of this article mentioned incorrect years about when a layoff is expected.
