Aircraft manufacturer Boeing is cutting more than 12,000 US jobs through layoffs and buyouts as the coronavirus pandemic seizes the travel industry, with more cuts expected.
Shortly after disclosing the job cuts, Boeing announced on Wednesday that it has resumed production of the grounded 737 Max jetliner.
Two deadly crashes of Max jets pushed Boeing into a financial crisis months before the coronavirus squeezed global air travel to a trickle.
Boeing, one of the nation’s biggest manufacturers, said it will lay off 6,770 US employees this week, and another 5,520 workers are taking buyout offers to leave voluntarily in the coming weeks.
The company had said it would cut 10% of a workforce that numbered about 160,000.
A Boeing spokesperson said the actions represent the largest number of job cuts, but several thousand additional jobs will be eliminated in the next few months.
The company previously announced more than 600 jobs cuts in Canada and Australia.
Chicago-based Boeing has reduced production rates on several airplane models in response to falling demand.
The company’s defence and space division has remained relatively stable, helping offset the decline in air travel and demand for passenger jets.
Air travel within the US tumbled 96% by mid-April, to fewer than 100,000 people on some days. It has since recovered slightly.
The Transportation Security Administration said it screened 264,843 people at airports on Tuesday, a drop of 89% compared with the same Tuesday a year ago.
“The Covid-19 pandemic’s devastating impact on the airline industry means a deep cut in the number of commercial jets and services our customers will need over the next few years, which in turn means fewer jobs on our lines and in our offices,” chief executive David Calhoun said in a memo to employees.
Mr Calhoun said the company faces the challenges of keeping employees safe and working with suppliers and airlines “to assure the travelling public that it can fly safe from infection.”
Union representatives said they were still seeking details of the layoffs.
“This is an extremely tough time for anyone working in aerospace, and certainly at Boeing,” said Bill Dugovich, a union spokesman.
Boeing’s crisis began with two crashes of its 737 Max, which killed 346 people and led regulators around the world to ground the jetliner in March 2019.
Company engineers have been working for more than a year and a half to fix flight-control software that played a role in the crashes, pushing the planes’ noses down repeatedly.
Federal regulators have not yet approved Boeing’s fixes, but on Wednesday, the company said workers at a factory in Renton, Washington started assembling Max jets “at a low rate” under procedures designed to prevent spreading coronavirus.
Boeing executives expect to resume deliveries of the plane before October, which will give the company some much-needed cash.