Boeing Co plans to cut about 4,500 jobs, or 6.6 per cent of its commercial-aircraft workforce, this year to reduce costs as a weakening global economy hurts demand for new planes.
The job losses will take place mainly in Washington state, Boeing’s manufacturing hub, and happen in the second quarter with 60-day notices beginning in late February, the company said in a statement on Friday. Boeing, which has a record backlog of 3,714 planes to fill, said the job cuts will focus on areas not directly associated with aircraft production.
“We are taking prudent actions to make sure Boeing remains well positioned in today’s difficult economic environment,” Scott Carson, the head of Boeing Commercial Airplanes, said in the statement.
Chief Executive Officer Jim McNerney told employees in November that Chicago-based Boeing would cut jobs and reduce costs to help offset expenses from aircraft program delays and to brace for possible order cancellations amid slumping air travel. Boeing on Thursday said last year’s orders dropped to 662 planes, down from 1,413 a year earlier.
US companies are cutting jobs amid a recession. Earlier on Friday, the Labor Department reported the US lost 2.589 million jobs in 2008, more than in any year since 1945.
December’s unemployment rate climbed more than economists forecast, to 7.2 per cent, the highest level in almost 16 years.
The layoffs announced on Friday include union and non-union workers, and the employees could eventually be called back, said Tim Healy, a spokesman for the company.
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The 4,500 total includes contractors. The employment level will return to about the same level as at the start of 2008 — about 63,500 — for the commercial half of Boeing’s business.
The company said in November that some of the reductions would be made through attrition and by firing contractors and that it was also reducing discretionary spending, such as travel, and taking other steps to lower expenses and boost productivity.
Boeing fell 34 cents to $44.45 at 4:01 pm in New York Stock Exchange composite trading.
Development costs have risen because of delays to three new Boeing models — the 787 Dreamliner, 747-8 and 777 — brought on by problems with suppliers, parts shortages and redesigns.
The work was also slowed by an eight-week machinists strike that ended November 2 and cost Boeing about $10 million a day in profit.
Boeing, which is also the second-largest US defense contractor, employed 162,191 workers as of December 31, a 3 per cent gain from five years ago, according to its website.
The company is preparing for a possible moderating in military spending as well because of the government’s focus on a financial bailout. Boeing said in November it was cutting 800 workers at its defense unit’s base in Wichita, Kansas, about 27 per cent of the workforce there.