Boeing Co plans to cut up to 8,000 jobs this year at its commercial airplane division. According to two sources familiar with the matter, this will be a move that could slash off $1 billion in costs and help the company battle for sales against European rival, Airbus.
According to The Guardian, Boeing is trying to cut off around 4,000 jobs. It could even double this year to cut off the costs as the world's biggest aeroplane producer faces extreme competition from Europe's Airbus.
The Chicago-based airline company also expressed that it is also planning to reduce the headcount in its commercial airlines division by 4,000. A spokesman also said that there will be voluntary layoffs and the rest will leave the positions unfilled. "While there is no employment reduction target, the more we can control costs as a whole the less impact there will be to employment," Boeing's Doug Alder stated.
Reuters also reported that, Boeing mentioned that the job reductions are just a part of the broad cost-cutting drive to keep Boeing and the defense company competitive. However, Boeing's stock posted the biggest turn down in the Dow Jones Industrial Average on Wednesday, with 1.88 percent to $128.58 drop.
Boeing is also reportedly using fewer workers in their recent operation. They are also cutting other costs to compete with Airbus. The savings are much needed to "win in the market, fund our growth and operate as a healthy business," Ray Conner, the chief executive of the airplane business, told employees last month.
The airline company made orders for 70 new planes through February compared with 18 for Airbus. But the tally also included 40 discounted 737s to United Airlines.
Investors also stated on Wednesday that they saw the employment cuts as an agitated response to a slowing business cycle and tough competition from Airbus. "It sounds reactive, not proactive," claimed a fund manager with a large stake in Boeing.
The Seattle Times claimed that the company dominated the global airline business for decades. It was even aiming for a 10% overall cut in Washington, which could mean that around 8,000 jobs are going in the north-western US state, where the company hires about 80,000.
Meanwhile, Boeing is attempting to revamp its expansive commercial jetliner manufacturing arm as Dennis Muilenburg, Boeing's new chief executive, seeks to make his mark. Muilenber used cost cuts to shore up profits in a period of forced defense spending when he ran Boeing's defense unit.
