Boeing to cut 5pc of commercial jet workforce

SEATTLE: Boeing Commercial Airplanes plans to cut five per cent of its workforce as it struggles to increase jetliner production, division chief Stephanie Pope told employees recently in an internal memo.

"As shared in our third-quarter earnings, we need to reset the pace of our production rate ramps to provide our factories and supply chain partners additional time to achieve stability.

"Adjusting our production schedules and reducing aircraft output puts us in an overstaffed position," Pope said in the memo reviewed by Reuters.

The reductions will happen through attrition and involuntary layoffs, with notices going out next month at the earliest, according to the memo.

Boeing is required in many states to give workers 60 days' notice.

Boeing chief executive officer Kelly Ortberg told analysts last month the company would miss its 737 jetliner production and delivery targets this year.

It now expects to reach a 737 production rate of 47 jets per month early next year, after previously projecting it would hit that pace by summer this year.

He also said the company does not expect to reach US$10 billion in free cash flow until 2029, a year later than analysts had expected.

That target is seen by investors as a critical milestone in its ongoing financial recovery following years of crises and controversies that left Boeing with a dented reputation, heavily in debt and under stricter regulatory scrutiny.

Boeing's popular 737 narrow-body jet is its single largest cash generator, making higher output essential for the company's recovery.

Boeing has also struggled to increase production of its popular 787 wide-body jet from eight jets a month to 10 a month.

The Seattle-based commercial airplane division had 50,494 employees up to last December, according to the company's website. — REUTERS