Wednesday 29 July 2020 1:54 pm

Boeing warns of further job cuts as coronavirus sends planemaker to $2.4bn loss

Aerospace giant Boeing warned that it was considering further job cuts due to the coronavirus pandemic as the planemaker fell to a $2.4bn (£1.9bn) second quarter loss.

In a letter to employees, chief executive Dave Calhoun wrote that the prolonged impact of the disease had caused “further reductions in our production rates and lower demand for commercial services, meaning we’ll have to further assess the size of our workforce”.

In May, Boeing said that it would cut 10 per cent of its 160,000 strong workforce after it was forced to slim down production volumes due to the uncertainty for global aviation.

Calhoun added: “This is difficult news, and I know it adds uncertainty during an already challenging time. We will try to limit the impact on our people as much as possible going forward.”

He also updated employees on new production rates for Boeing’s aircraft, which have seen demand tumble on the back of global travel restrictions.

Production of the 737 will now be slower than initially planned, with the firm setting a new target of 31 per month by the beginning of 2022.

Boeing will also reduce the combined 777/777X output rate to two per month in 2021, which is one unit lower per month than was announced last quarter.

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It will cut 787 production to six per month in 2021, a further adjustment down from the reduction announced last quarter to 10 per month currently and seven per month by 2022. 

Finally, it said it would end production of the 747 in 2022. Last week, British Airways said it would retire its entire fleet of the iconic jumbo jet “with immediate effect”.

The so-called “Queen of the Skies”, which came into service in the 1970s, is far less efficient than modern models.

Airlines such as Air France, Delta and United had already retired their fleets even before the pandemic struck.

Calhoun ended his letter on a resolute note, saying: “Aerospace has always proven to be resilient — and so has Boeing”.

Coming on back of the grounding of the 737 Max due to two crashes last year, the coronavirus has compounded the worst crisis in the planemaker’s history. 

It estimated that it would take around three years for demand for its models to return to pre-Covid levels.