- By Stocktry Expert
- 30th Jul 2020
Boeing to cut down jobs and production of aircraft due to COVID-19 crisis
The Corona Virus has affected different sectors of the market, Travel is one of them.
The impact of this crisis has led Boeing to make tough decisions regarding the employees and aircraft production. On Wednesday, Boeing CEO Dave Calhoun shared a staff note after the release of a $2.4 billion quarterly loss of the company. He said, “Regretfully, the prolonged impact of COVID-19 causing further reductions in our production rates and lower demand for commercial services means we’ll have to further assess the size of our workforce,”.
The company plans to use the severance costs for 19,000 employees leaving the company to raise $2 billion in charges in the quarter. Other reductions will be replaced by hiring in other departments like defense unit
The defense unit has served better than its commercial business, bringing in $6.6 billion in a year.
Boeing shares have descended 2.8% to $166.01 and its stock price down by more than 50% since last year. The pandemic is an addition to financial losses as the company was in crisis even before the COVID situation due to two crashes of its 737 Max that claimed 346 lives.
However, The company expects an increase in air travel demand globally to recover to 2019 levels in 2024, a year later than it previously forecast.
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