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Boeing to cut 4,000 jobs in commercial aircraft retool

business Updated: Mar 31, 2016 01:34 IST

This file photo taken on December 8, 2015 shows Boeing's 737 MAX named the "Spirit of Renton" on the tarmac at the Boeing factory in Renton, Washington.(AFP Photo)

US aerospace giant Boeing will trim about 4,000 jobs in its commercial airplanes division as it seeks to cut costs and boost productivity, a company spokesman told AFP on Wednesday.

Staffing reductions through mid-year, including hundreds of executives and managers, will be done through attrition and voluntary layoffs, leaving open jobs unfilled, spokesman Doug Alder said in an email.

“We’ll only use involuntary layoffs as a last resort,” he said.

The payroll reduction is part of a streamlining announced last month that includes non-labor cost savings and supply-chain savings, he noted.

At the end of February, Boeing’s commercial airplanes division had 82,310 employees. The Chicago-based company, which includes defense and space divisions, among others, employed 159,250 people.

Shares in Dow member Boeing dipped 0.3 percent to 130.50 in morning trade.

Boeing, facing stiff competition from European aircraft maker Airbus, is in the process of transitioning aircraft production, such as the 737, its best-selling jet, as it introduces the new 737 MAX and its long-range 777 to the new 777X.

Boeing had a record 762 commercial aircraft deliveries in 2015, topping Airbus, but its rival had a substantial edge in net orders last year, at 1,080 versus 768 for Boeing.

As of March 22, Boeing had 107 net airplane orders this year amid a robust air travel industry that is seeing strong demand for planes.

The job cuts reflect the company’s positioning even as orders roll in, another Boeing spokesman said.

“It’s all part of year-over-year growth in productivity and driving costs down. That sort of effort never stops. Just because we’re building more doesn’t mean we shouldn’t always become more productive,” spokesman Bernard Choi told AFP.

In January, Boeing forecast deliveries would decline this year for the first time since 2010, to between 740 and 745.

It also predicted flat to slightly lower 2016 revenues and core earnings per share.