Battered by pandemic, Boeing cutting 30,000 jobs in two years

A worker closes a door of a Garuda Indonesia Boeing 373-800 NG with a new face mask design at the airport in Tangerang as part of a campaign to promote the wearing of face masks amid the COVID-19 pandemic. (AFP)
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Updated 29 October 2020

Battered by pandemic, Boeing cutting 30,000 jobs in two years

  • A sharp drop in commercial plane travel has prompted airlines to cancel plane orders

NEW YORK: Pressured by a prolonged commercial travel downturn and the hit from 737 MAX, Boeing has announced additional job cuts that will lower headcount by 30,000 positions over two years.

The planemaker, which has been in belt-tightening mode throughout 2020 in the wake of the coronavirus on top of the 737 MAX crisis, plans to eliminate around 7,000 more jobs through the end of 2021.

The latest announcements will shrink headcount down to 130,000 from 160,000 in January of this year, a drop of nearly 19 percent in less than two years.

“The global pandemic continued to add pressure to our business this quarter, and we’re aligning to this new reality by closely managing our liquidity and transforming our enterprise to be sharper, more resilient and more sustainable for the long term,” said Chief Executive Dave Calhoun.

A sharp drop in commercial plane travel has prompted airlines to cancel plane orders or defer deliveries, crimping Boeing’s revenues.

On top of that, the company’s finances have been under pressure due to the grounding since March 2019 of the Boeing 737 MAX, which is nearing regulatory approval to resume service after a lengthy oversight process with air travel authorities.

In the third quarter, Boeing reported a loss of $449 million, compared with profits of $1.2 billion in the year-ago period as revenues fell 29.2 percent to $14.1 billion.

Calhoun has emphasized that while Boeing faces a difficult medium-term environment, it expects airline demand to eventually return and that the company is well positioned in the defense and space business, which is steadier than commercial travel.

Calhoun has taken steps in 2020 to bolster its cash position since the coronavirus devastated the travel market.

Besides two voluntary layoff programs and involuntary job cuts, these have included suspending dividend payments, trimming commercial plane production and announcing a decision to consolidate manufacturing of the 787 Dreamliner plane to one venue from two in a cost-saving move.

The company has also taken steps to raise cash in the face of the difficult market, undertaking a $25 billion bond offering in the spring that averted the need to take advantage of a US government program that had been established for the company.

On Wednesday, Boeing did not announce additional reductions in commercial plane production.

Boeing said it made “steady progress” to return the MAX to service following the lengthy grounding.

Earlier this month, the top European air safety regulator said he expected that the planes could start flying before the end of the year.

The head of the US Federal Aviation Administration also signaled the plane could soon be cleared, while emphasizing that work still had to be completed before final approval.

Shares in Boeing fell 0.8 percent to $154.01 in pre-market trading.


Egypt expects economic growth between 2.8 and 4% in 2021

Updated 29 November 2020

Egypt expects economic growth between 2.8 and 4% in 2021

  • Unemployment indicators also reflected the economy's development

CAIRO: Egyptian Finance Minister Mohamed Maait said the country was reaching positive growth rates, calling it a great achievement in light of the global conditions brought on by the coronavirus pandemic.

Maait said the estimated rate of economic growth in the fiscal year 2021-2022 would reach between 2.8 and 4 percent.

He said the percentage varied according to how each person perceived it sectorally, and that industries such as tourism and aviation were significantly affected by the spread of the disease.

“We have a priority to make room for the private sector’s participation in development projects,” the minister added.

He explained that there would be strengthened cooperation with the Transport Ministry in implementing its projects in partnership with the private sector.

Egypt had been hoping for growth between 6 and 6.5 percent before the coronavirus crisis broke out.

The country topped the emerging market economies in containing the rate of inflation during the current year, according to data from the Egyptian cabinet, despite the global repercussions of the health emergency.

The International Monetary Fund (IMF) said that Egypt achieved the largest annual decline in the inflation rate in emerging markets in 2020, compared to 2019, with a decline of 8.2 percentage points.

Among the effects of the economic reform plan were inflation rates falling to 5.7 percent during 2019-2020, compared to 13.9 percent in 2018-2019.

Unemployment indicators also reflected the economy's development. 

Recent data from the Egyptian Central Agency for Public Mobilization and Statistics showed the unemployment rate declining to 7.3 percent in the third quarter of this year, compared to 7.8 percent a year ago.

Egypt's monetary reserves rose to $39.22 billion by the end of last October, according to the country's central bank.

The IMF said the performance of the Egyptian economy exceeded expectations.