Apr 29, 2020 - Economy & Business

Boeing cuts 10% of its workforce as coronavirus slams demand

Completed 737 MAX aircraft on Boeing's production line in Washington earlier this month. Photo: Jason Redmond/AFP via Getty Images

Boeing said Wednesday it would cut 10% of its workforce in the face of dismal demand for its planes during what is likely to be a long recovery for the airline industry from the coronavirus pandemic.

The big picture: Boeing is facing a double whammy from the coronavirus-induced decline of air travel plus the more than yearlong grounding of its best-selling plane, the 737 MAX.

  • With air travel down as much as 95% during the pandemic, airlines are cancelling or delaying orders for new planes, further slowing Boeing's production plans.

Driving the news: Boeing posted a $641 million loss in the first quarter and said it burned through $4.3 billion in cash during the period.

  • The company said it will seek to reduce its payroll by about 10% through voluntary measures and "involuntary layoffs as necessary."
  • But some divisions, including its commercial airplanes and services businesses, could see cuts as deep as 15%, CEO David Calhoun said in a memo to employees.
  • Boeing had about 160,000 employees at the end of last year.

The state of play: The aerospace giant is scrambling to ensure it has liquidity to weather the crisis.

  • Boeing has recently drawn down a nearly $14 billion loan.
  • It would qualify for as much as $17 billion in taxpayer relief set aside in the CARES Act for "businesses critical to maintaining the national security."
  • Such aid is controversial, however, given Boeing's problems with the MAX.
  • Calhoun has also balked at the possibility of giving the government a stake in the company in return for federal aid.

What they're saying: "Access to additional liquidity will be critical for Boeing and the aerospace manufacturing sector to bridge to recovery, and the company is actively exploring all of the available options. Boeing believes it will be able to obtain sufficient liquidity to fund its operations," Calhoun said.

  • The company will share further information in a call with analysts later this morning.

Go deeper

Updated 26 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 10 p.m. ET: 5,923,432— Total deaths: 364,836 — Total recoveries — 2,493,434Map.
  2. U.S.: Total confirmed cases as of 10 p.m. ET: 1,745,930 — Total deaths: 102,808 — Total recoveries: 406,446 — Total tested: 16,099,515Map.
  3. Public health: Hydroxychloroquine prescription fills exploded in March —How the U.S. might distribute a vaccine.
  4. 2020: North Carolina asks RNC if convention will honor Trump's wish for no masks or social distancing.
  5. Business: Fed chair Powell says coronavirus is "great increaser" of income inequality.
  6. 1 sports thing: NCAA outlines plan to get athletes back to campus.

In photos: Protests intensify across the U.S. over George Floyd's death

Protesters outside the Capitol in Washington, DC, on May 29. Photo: Eric Baradat/AFP via Getty Images

Mass protests in Atlanta, New York City and Washington, D.C., sparked clashes with police on Friday, as demonstrators demanded justice for the death of George Floyd, a black man who died after at least one police officer knelt on his neck on Monday.

The big picture: The officer involved in the killing of Floyd was charged with third-degree murder on Friday, after protests continued in Minneapolis for three days.

Zuckerberg says Trump’s “shooting” tweet didn’t violate Facebook’s rules

Mark Zuckerberg at the 56th Munich Security Conference in Munich, Germany on February 15. Photo: Abdulhamid Hosbas/Anadolu Agency via Getty Images

Facebook did not remove President Trump's threat to send the National Guard to Minneapolis because the company's policy on inciting violence allows discussion on state use of force, CEO Mark Zuckerberg explained in a post on Friday.

The big picture: Zuckerberg's statement comes on the heels of leaked internal criticism from Facebook employees over how the company handled Trump's posts about the Minneapolis protests and his unsubstantiated claims on mail-in ballots — both of which Twitter has now taken action on.