Early Wednesday, October 28th, Boeing announced that they would be cutting 7,000 more jobs due to COVID-19-related downturns in the air industry. This is Boeing’s second major staffing cut in three months: In July, they announced that 19,000 workers were being eliminated. This brings Boeing, one of the largest employers in American manufacturing, down to a workforce of approximately 130,000.
COVID-19 isn’t the only thorn in the airplane-building giant’s paw – They haven’t yet recovered from the furor around the 737 Max, which was grounded as a body after two lethal crashes due to, allegedly, bad software design. But 2020 has been still worse, with air travel one of the worst economic casualties of the global pandemic.
Just before announcing the job cuts, Boeing also announced their third quarter losses – a $449 million dollar loss, and they considered that to be good news. Everyone expected it to be worse. Compare it to the third quarter of 2019, when, one day before the crash of Lion Air flight 610, the first Max crash, they announced a quarterly profit of $1.17 billion.
Boeing still has 450 of the 737 Max planes in storage, built and ready to fly but with no buyers. They had expected to have half of those sold by the end of 2021, but that timeline is likely to be slowed down now. Over $6 billion has been spent buying back Max planes from customers who no longer want the risk. They also have approximately 50 unsold Dreamliners, although those, fortunately, are untainted by safety concerns.
Southwest Airlines, traditionally Boeing’s largest customer and known for only flying 737s, has announced that they’re considering a contract with competitor Airbus.
Stock in Boeing has dropped over 50% this year, with an additional 3% drop immediately following Wednesday’s announcement. The company didn’t take any federal pandemic-relief funds, but it has taken billions of dollars in private credit to remain fluid.
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