Boeing says it’s planning to reduce its workforce by 10% and cut back on production of wide-body jets in response to the coronavirus pandemic’s dramatic effect on the aviation industry.
“We will be a smaller company for a while,” David Calhoun, Boeing’s CEO and president, told investors today during a conference call.
The moves came as the company reported an adjusted loss of $1.7 billion and a negative cash flow of $4.7 billion for the first quarter of the year. It was the second quarterly loss in a row, but it wasn’t as bad as analysts feared. As a result, Boeing’s shares finished today’s trading session up nearly 6%, at a closing price of $139.
In a letter to employees, Calhoun said that the pandemic has delivered a “body blow to our business.”
“The aviation industry will take years to return to the levels of traffic we saw just a few months ago,” he wrote.
In response, the company has started executing a plan for a 10% reduction in total workforce through a combination of voluntary layoffs, natural turnover and involuntary layoffs as necessary.