Boeing Commercial Airplanes says it’s following through on its job reduction plan with the target of reducing its workforce by 4,000 positions by midyear.
So far, there have been no involuntary layoffs, company spokesman Doug Alder told GeekWire in an email today. But he said that may have to come as a “last resort” in order to reduce costs and remain competitive with Airbus, Boeing’s European rival.
In addition to the workforce reduction, Boeing has been trying to save on non-labor costs and supply chain expenses, Alder said.
Boeing Commercial Airplanes employs about 82,000 people worldwide, accounting for more than half of the Boeing Co.’s total job count. Boeing’s employment in Washington state, including employees in the company’s defense and administrative units as well as commercial airplanes, amounts to about 78,000.
The Seattle Times, which first reported the numbers behind the company’s job reduction plan, quoted sources as saying that the reductions could eliminate as many as 8,000 jobs, or about 10 percent of the state’s total, by the end of the year.
Alder said there was no firm target for the job reductions. “The more we can control costs as a whole – the less impact there will be to employment,” he said.
“Staffing reductions through midyear, including hundreds of executives and managers, are projected to total approximately 4,000 positions – none of which involve involuntary layoffs,” Alder said in his email. “We’ve been able to reduce staffing levels through attrition, leaving open positions unfilled, and voluntary layoffs. We’ll only use involuntary layoffs as a last resort.”
The Times said employees were being offered severance packages that advance full pension eligibility and provide a week of pay for every year of service, up to a maximum of 26 weeks. Voluntary layoffs were expected to reach 1,600 by midyear.
Ray Conner, the CEO of Boeing Commercial Airplanes, told employees in February that job reductions would be part of a plan to “win in the market, fund our growth and operate as a healthy business.” But at the time, no figures were specified.
Boeing has been facing stiff competition from Airbus as well as other challenges due to broader economic trends. In January, the company said it would trim back 747 production from one jet a month to one every two months, due to a slower-than expected recovery of the air cargo market. It’s also cutting back on 777 production.
At the same time, the company is ramping up production of a new version of the single-aisle 737, which is being strongly challenged in the marketplace by Airbus’ A320 line.