Boeing to slash its workforce by 10% to preserve cash amidst the Coronavirus pandemic

The struggle for the global airline industry continues as Coronavirus spreads quickly across borders. In recent news, Boeing (NYSA:BA) said on Thursday that it plans on slashing its workforce by roughly 10% to cut costs amidst the rising financial challenges due to the ongoing health crisis.

According to the Wall Street Journal, Boeing is expected to resort to involuntary layoffs, early retirements, and buyouts to reduce its workforce aimed at maintaining its financial stature.

Boeing To Direct The Job Cut At Its Commercial Arm

As per the sources, Boeing is expected to direct the job cut at its commercial arm that has been hit the hardest by the health emergency. The largest U.S airplane manufacturer declined to comment any further on the news at this stage.

Boeing’s financial challenges that started with the grounding of its world-renowned 737 Max jetliner in March 2019 after two fatal crashes in five months that killed 346 people, worsened with the outbreak of the flu-like virus that pushed the airplane manufacturer into temporarily suspending production at all of its prominent facilities in the U.S including the South Carolina factory that is dedicated to the production of its 787 jets.

The recently announced extension on the shutdown of Boeing’s factories didn’t come with an expected date of resuming operations either.

CEO Dave Calhoun of Boeing had reiterated that the impact of COVID-19 on the global aerospace industry is expected to be long lasting as he addressed the employees and proposed a plan that entailed voluntary layoffs.

To further preserve cash, Boeing had also paused recruitment last month and restricted overtime pay to a handful of critical areas only.

Airbus Slashes Production Of A320 Jetliner

Boeing’s European rival and currently the world’s largest airplane manufacturer, Airbus, also highlighted recently that it did not receive any new order in February that further accentuates that the global airline industry is suffering from an unprecedented decline in demand as governments from across the globe resort to countrywide lockdowns that restrict people to their homes. Airbus also slashed production of its most-popular A320 jetliner recently.

Boeing’s announcement, however, was well-received in the stock market as the company jumped around 2.5% in extended trading on Thursday. At £124 per share, the company is still trading over 50% down year to date.

At the time of writing, Boeing’s market value is capped at £68.64 billion. The airplane manufacturer has lost around 65% as compared to its record-high in the first week of March 2019.