Newspaper article The Christian Science Monitor

Why Boeing Will Cut More Than 4,500 Jobs by June

Newspaper article The Christian Science Monitor

Why Boeing Will Cut More Than 4,500 Jobs by June

Article excerpt

A more competitive Boeing means fewer employees.

The aerospace mammoth Boeing confirmed Tuesday that it will cut thousands of jobs by June. According to Reuters, about 4,000 positions will be stripped from its commercial airplane division and another 550 will be cut from from flight and lab testing. Boeing plans on shedding the positions through attrition and voluntary layoffs, not forced layoffs. Currently, Boeing employs about 160,000 people.

The company had previously announced a vague plan for job cuts in February, citing the need to cut jobs to compete but without a set date or target.

"To win in the market, fund our growth and operate as a healthy business, we are taking thoughtful steps to reduce the cost of designing and building our airplanes, part of which involves evaluating our employment levels across all of commercial airplanes," Boeing spokesman Doug Alder told reporters in a February statement.

But as the airline industry has expanded, what's behind the current cuts?

The airline industry has boomed in the past years, especially for Boeing and Airbus. The aircraft manufacturing titans are turning out more planes and expanding into more markets, with assembly and manufacturing plants slated to open in China. In 2015, Boeing also exceeded its forecast for plane delivery, with a record 762 finished planes reaching clients.

But the company is also feeling the pressure of competition.

Despite the record deliveries, Airbus is overshadowing Boeing in future orders. Last year, Airbus won 1,036 new sales or 57 percent of the total new orders placed with Boeing and Airbus, according to The Guardian. Airbus also advanced into many key areas where Boeing once dominated, including winning 63 percent of single-aisle sales - a portion of the industry where Boeing's sales of 737s provided a significant contribution to the US company's total earnings.

During an internal webcast for employees, Boeing Commercial Airplanes CEO Ray Conner cited the single-aisle sales as one example of how Boeing was facing an expanding competition from Airbus. He called the situation "alarming," according to The Seattle Times. …

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