US Aerospace giant Boeing will trim about 4,000 jobs by June in its commercial airplanes division as it seeks to cut costs and boost productivity and that may be only halfway towards the total cuts this year, a company spokesman told AFP on Wednesday (Mar 30).
Asked about the plans, Boeing said Tuesday the initial jobs eliminated includes "hundreds of executives and managers" and that the 4,000 figure will be achieved through normal attrition and a voluntary buyout package for about 1,600 employees.
"While there is no employment reduction target, the more we can control costs as a whole the less impact there will be to employment," Alder said. "We'll only use involuntary layoffs as a last resort,"
There may be more pain to come, however. In a further blow to Boeing employees, reports in the US suggested the plane maker could slash an additional 4,000 jobs in the second half of the year once the first round of losses is complete.
Boeing, facing stiff competition from European aircraft maker Airbus, is in the process of transitioning aircraft production, such as the 737, its best-selling jet, as it introduces the new 737 MAX and its long-range 777 to the new 777X.
Boeing had a record 762 commercial aircraft deliveries in 2015, topping Airbus, but its rival had a substantial edge in net orders last year, at 1,080 versus 768 for Boeing. As of March 22, Boeing had 107 net airplane orders this year amid a robust air travel industry that is seeing strong demand for planes
"The competitive environment is growing increasingly challenging for Boeing," Noah Poponak, an aerospace analyst at Goldman Sachs Group Inc., said in a report. "Airbus sounds set on gaining market share, and it is becoming increasingly apparent that Airbus is pricing more aggressively to do so."
In February, Ray Conner, chief executive of Boeing's airplane business, warned employees that job cuts were necessary to "win in the market, fund our growth and operate as a healthy business".
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