Boeing slashes thousands of jobs

Boeing agrees to cut 4,500 jobs by the mid-point of the year as part of its cost reduction programme

A Boeing 747 aircraft lands at London Heathrow airport. Boeing has announced plans to cut 4,500 jobs by the mid-point of 2016 

On March 30, the world’s number one aircraft manufacturer announced plans to slash 4,500 jobs by the mid-point of the year as part of the company’s wide-ranging cost reduction push.

Despite having delivered 65 percent more commercial airplanes in 2015 than in 2010 and 57 percent more military aircraft and satellites, the company has been forced to make job cuts. The hope is that, by doing so, it will be able to satisfy demand for cheaper airliners.

The Seattle Times reported that job cuts this year could total roughly 10 percent of Boeing’s workforce, which otherwise translates to a massive 8,000 jobs. The initial bout of losses will include hundreds of executives and managers, according to a company spokesperson. Approximately 1,600 workers are facing the prospect of voluntary redundancy, and the rest normal attrition.

The company’s targets, according to Vice President of Communications at Boeing Commercial Airplane Sean McCormack, are dollar-based, and the major cost-savings programme, if successful, will reel in the company’s expenditure by billions of dollars.

Broadly speaking, the plan is to reduce supplier costs, increase productivity and cut back on inventory, overtime, contractor expenses and business travel. Additional job losses are very much a possibility if the reduction in non-labour costs stops short of the desired outcome.

The maker of the jumbo jet is betting on the ability of cost reductions to quiet shareholder concerns that falling jet prices could impact the company’s profitability. To compound the issues weighing on Boeing’s bottom line, the company’s European rival, Airbus, recently overtook the world number one in terms of future orders, something that gives shareholders another reason to feel anxious.