Boeing expects to reduce workforce by 30K after third-quarter profits report

Company still plans to consolidate 787 production to N. Charleston facility in mid-2021

VIDEO: Boeing expects to reduce workforce by 30K after third-quarter profits report

CHICAGO (WCSC/AP) - The CEO of Boeing said Wednesday they expect a workforce of about 130,000 employees by the end of 2021, 30,000 fewer than it began with in 2020.

That is a far deeper cut to its workforce than the 19,000 jobs the company said it planned to trim just three months ago.

Boeing reported third quarter profits it says reflects a decrease in commercial airplane deliveries and services it says is due to the COVID-19 pandemic.

Boeing spokesperson Libba Holland said the company is not yet breaking down numbers by state.

“Each of our business units and functions are carefully making staffing decisions to prioritize natural attrition and stability in order to limit the impact on our people and our business," Holland said. "As with our previous workforce actions, we expect our corporate functions and commercial airplane and services businesses to be most affected.”

The company reported third quarter revenues of $14.1 billion, a 29% decline over third-quarter revenue from 2019.

The company’s third-quarter operating margin for its commercial airplanes division decreased to -38.1 percent, primarily driven by lower delivery volume, as well as $590 million of abnormal production costs related to the 737 program, a news release states.

“The global pandemic continued to add pressure to our business this quarter, and we’re aligning to this new reality by closely managing our liquidity and transforming our enterprise to be sharper, more resilient and more sustainable for the long term,” Boeing President and Chief Executive Officer Dave Calhoun said in a statement. “Our diverse portfolio, including our government services, defense and space programs, continues to provide some stability for us as we adapt and rebuild for the other side of the pandemic.”

Calhoun said the company remains focused on the health and safety of employees and their communities and is proud of the team’s “dedication and commitment” in “this challenging environment.”

“Despite the near-term headwinds, we remain confident in our long term future and are focused on sustaining critical investments in our business and the meaningful actions we are taking to strengthen our safety culture, improve transparency and rebuild trust,” he said.

Its commercial airplanes division delivered 28 airplanes during the quarter but here is a backlog including more than 4,300 airplanes valued at $313 billion. The division’s third-quarter revenue decreased to $3.6 billion in third-quarter.

Earlier this month, Boeing announced it would consolidate 787 production in South Carolina in mid-2021.

The company began assembling 787-8 and 787-9 airplanes at its Everett, Washington, site in 2007, and brought the North Charleston facility on line as a second final assembly line in 2010.

However, only the North Charleston site is set up to build the larger 787-10 model. Production of the smaller 787 models will continue in Everett until the program transitions to the previously-announced production rate of six airplanes a month in 2021.

Boeing confirmed back in July that it was doing an in-depth study into the feasibility of producing the 787s at a single location as a way to reassess all aspects of the company’s footprint.

In April, it reduced 787 production to only 10 planes per month, but in July, it further reduced production to just six planes per month.

Copyright 2020 WCSC. The Associated Press contributed to this report. All rights reserved.