Boeing announced plans to lay off almost 7,000 workers this week, as the coronavirus crisis continues to hammer the aircraft manufacturer.
“We have come to the unfortunate moment of having to start involuntary layoffs. We’re notifying the first 6,770 of our U.S. team members this week that they will be affected,” Boeing CEO David Calhoun wrote Wednesday in a letter to employees.
The Chicago-based airplane manufacturer — the biggest exporter in the U.S. — already announced it would trim its workforce by around 10 percent. Boeing said Wednesday that 5,520 employees had been approved for voluntary layoff. Calhoun also said Wednesday that international locations would see “workforce reductions.”
“I wish there were some other way,” Calhoun wrote.
Citing the “whipsawing” of the global pandemic, Calhoun said “it will take some years” for the airline industry to “return to what it was just two months ago.”
Air travel has seen a 95 percent decline in traffic since the coronavirus hit, with major airlines canceling the majority of domestic flights, suspending nearly all international flights, pulling out of airports, laying off pilots and crew, and cutting worker pay and hours.
“The threat to the airline industry is grave. There’s no question about it. And apocalyptic does actually accurately describe the moment,” Calhoun said earlier this month in an interview with Savannah Guthrie on NBC’s “TODAY.”
He also suggested that a major U.S. airline would “most likely” have to go out of business as a result of the coronavirus pandemic.
That comment drew the ire of the major airlines, requiring some smoothing over of the relationship between Boeing and its key customers. A high-ranking airline executive at United Airlines complained to Calhoun about the comment, and American Airlines CEO Doug Parker was also upset about the Boeing CEO’s comment, a person familiar with the matter told CNBC.
Boeing has been battling its biggest ever crisis, after two fatal crashes involving its best-selling 737 Max jet. In March, the company saw a near-record number of order cancellations for its passenger jets, and zero new orders in April, exacerbating its financial woes. The troubled 737 Max has been grounded worldwide since last March.
Former CEO Dennis Muilenburg left his job in December, after a complete halt to production of the Max led to the company’s worst year in decades.