Boeing moving to trim workforce amid coronavirus slump: report

Boeing moving to trim workforce amid coronavirus slump: report
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Boeing announced plans Thursday to provide contract buyouts and offers of early retirement for some employees as the company's production suffers under the coronavirus epidemic.

The company announced the plans in an internal memo to employees that was posted on the company's website, citing the need to "protect the future of our business."

"[O]ne thing is already clear: It will take time for the aerospace industry to recover from the crisis. When the world emerges from the pandemic, the size of the commercial market and the types of products and services our customers want and need will likely be different. We will need to balance the supply and demand accordingly as the industry goes through the recovery process for years to come," the statement reads.

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"It's important we start adjusting to our new reality now," the letter continues. "We want to address it through natural turnover and voluntary employment actions to the extent we responsibly can. To that end, we are initiating a voluntary layoff (VLO) plan that allows eligible employees who want to exit the company to do so with a pay and benefits package. This move aims to reduce the need for other workforce actions."

Already in troubled economic straits due to the grounding of the company's 737 Max line following two deadly crashes, Boeing now faces the possibility that airlines will not be able to afford new aircraft purchases even after the 737 Max planes are approved for commercial flights due to airlines' own economic troubles brought on by the epidemic.

Boeing has reportedly halted production at its location north of Seattle due to the ongoing coronavirus outbreak and announced that it would suspend its dividend for shareholders.

The company employs roughly 160,000 workers nationwide and has yet to announce layoffs as other industries have seen amid the outbreak.

Other significant players in the airline industry have been less fortunate: United Airlines warned last week that even should it benefit from the government's recently-passed stimulus package, it will not be able to avoid layoffs in the months ahead.

“Based on how doctors expect the virus to spread and how economists expect the global economy to react, we expect demand to remain suppressed for months after that, possibly into next year,” United's CEO and president wrote in a joint letter to employees. “That means being honest, fair and upfront with you: if the recovery is as slow as we fear, it means our airline and our workforce will have to be smaller than it is today.”

--Updated at 11:20 a.m. with Boeing's statement.