Boeing Gearing Up To Cut US Workforce This Week, Plans To Let 2,500 Employees Go

Boeing Co. BA is planning to announce cuts to its domestic workforce as early as Friday.

What Happened

After announcing a 10% reduction in its global workforce, Boeing is cutting its workforce in the United States this week, according to a spokesperson for the Society of Professional Engineering Employees in Aerospace (SPEEA). The layoffs will amount to as many as 2,500 employees, the Wall Street Journal reports.

Last month, Boeing CEO, David Calhoun, said the company had begun to take action to lower the number of employees by nearly 10% through voluntary layoffs, natural turnover, and involuntary layoffs as necessary.

Why It Matters

According to Calhoun, “deeper reductions,” to the tune of 15% are needed in areas exposed to Boeing’s commercial customers: commercial airplanes, services, businesses, as well as its corporate functions.

SPEEA told Reuters that 1,300 of its members are taking voluntary layoffs. Boeing’s engineering union officials were told to expect cuts ranging from 15% to 20% of its membership, affecting technical workers and engineers in Washington State and California.

In April, orders for Boeing amounted to zero for the second time in 2020. In addition, 108 orders for the beleaguered 737 MAX  were canceled, further compounding Boeing’s woes.

Price Action

On Tuesday, Boeing shares traded 5.24% higher at $144.73.