In conjunction with announcing quarterly financial performance results this week, commercial and military aircraft designer and manufacturer Boeing indicated that the company would cut thousands of additional jobs.

The company has already initiated efforts to shed upwards of 16,000 positions and with this week’s announcement, Boeing CEO David Calhoun has told employees that the manufacturer aim to have a total headcount of 130,000 by the end of 2021.

Boeing 787 Production Line

At the start of this year, the company had reported a total of 160,000 employees. The move comes after the company had previously announced a 10 percent workforce reduction.

Boeing Executive Vice President of Enterprise Operations and Chief Financial Officer (CFO) Greg Smith indicated to investors this week:

We’re taking actions to resize, reshape and transform our business to preserve liquidity, adapt to the new market reality and ensure that we deliver the highest standards of safety and quality as we position our company to be more resilient for the long term. Our diverse portfolio, including our government services, defense and space programs, continues to provide some stability as we adapt and rebuild stronger for the other side of the pandemic.”

Boeing’s report of third-quarter financial performance included total revenues of $14.1 billion with negative cash flow of $5.6 billion. Those numbers reportedly beat analyst estimates on the loss side. The ongoing COVID-19 impact on reduced air travel coupled with the now approaching two-year grounding of the 737 MAX aircraft due to two significant crashes continue to drag on new order flows, added cancellations of aircraft orders and overall cash drain.

For the nine months ending on September 30, the manufacturer has delivered a total of 98 commercial aircraft as compared to 301 aircraft in the year earlier Q3 end point. A mere 28 aircraft were delivered in the latest quarter.



The implication of this week’s announcement looms large for U.S. aerospace as well as global supply networks.

With the U.S. government declining to offer direct stimulus aid to domestic airlines and the aerospace manufacturing supply network, and with Boeing itself declining government aid with deemed strings attached, the notions of broader supply chain related headcount reductions are real.

Boeing’s extension of headcount reductions through the year 2021 is a likely indication that the company has determined that it will take a longer period to recover from its current corporate crisis. This week’s news of additional planned job losses comes with the announcement earlier this month that the manufacturer will end 787 Dreamliner production at its Everett, Washington production facility and  transition future 787 production to the company’s North Charleston South Carolina production complex. Added to this are recent reports that company is potentially seeking to lease out some of its existing Everett Washington administrative offices or idle production facilities all point to continued efforts to preserve liquidity.

As noted in this week’s edition of our Supply Chain Matters COVID-19 Multi-industry Supply Chain Disruption News Capsule, rival Airbus indicates that it is readying plans to once again ramp-up output of new A320neo aircraft to begin in the mid-2021 period. While Airbus indicates that no final decisions have been made regarding this planned ramp-up, the sense of more optimism in the timing of industry recovery is more prevalent for this manufacturer’s supply ecosystem.

By the view of such industry watchers, upwards of 20 percent of this industry’s global supply chain suppliers are at concerning financial risk.  Just as important are years of technical talent and expertise being dislocated.

No industry supply chain has become immune to the impacts of this pandemic.


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