The year has been really tough for the planemaker, as the 737 MAX and COVID-19 crisis both took the company by its neck. The 737 MAX model was infamously reported in 2 crashes, leading the plane to be banned from the Sky. Just when the skies got clear, the aviation world was hit by the pandemic.
Global Layoff Plans
Boeing is taking a major step and laying off 6,700 employees from its workforce in the United States. The company has decided to lay off 10% of its workforce globally. They have also approved voluntary buyouts, which will be spread over in the coming weeks. The voluntary buyout will be for about 5,500 employees. The employees will be informed and will leave in the coming weeks.
As air travel is at a halt, there has been a 95% decline in the number of flights since the pandemic. Airlines are not operating their domestic flights and have canceled most of their international routes, terminating their operations at the airports, laying off employees and cutting costs in every possible way.
CEO Dave Calhoun
CEO Dave Calhoun said to his employees “We have come to the unfortunate moment of having to start involuntary layoffs. I wish there was some other way.”
The Boeing company’s commercial business is severely affected. Most of the airlines have grounded their aircraft due to low demand in air travel and do not plan for further investments, which will affect the company’s operations causing deep financial cuts.
Boeing’s challenging future
Boeing will have a low demand for its commercial jets and other services, which will result in lesser jobs and the company will have to lay off more employees with time.
The company has planned to overall cut 16,000 jobs. 4,000 more employees will be laid off. The remaining number of employees to be laid off will be announced in the next few months.
This is a major crisis for the Boeing company as there are no new orders for its passenger jets, and the previously booked orders are being canceled leading to financial misery for the company.
Future of Global Aviation Industry
The global aviation industry is expected to suffer a loss of about $314 billion, due to the COVID-19 situation. According to experts, 55% of the annual passenger revenues will be lost during this period and this has led to major economic crises for all airlines. The speed of recession will be far much faster than the anticipates and the number of flights across the globe has been hit by a good 80%.