Boeing plans to reduce the workforce in its civil aviation unit by 10 percent to cut costs as the coronavirus causes a crisis for airlines, two sources familiar with the matter told AFP.
The layoffs would impact the unit manufacturing the troubled 737 MAX, which has been grounded for more than a year after two deadly crashes, as well as the 787 and 777 long-haul aircraft, the sources said.
The job cuts could affect up to 7,000 workers. Boeing employs more than 160,000 people worldwide, including 70,000 in Washington state, where most of its civilian aircraft are assembled. Only part of the 787 is produced in South Carolina.
The news comes just a day after the company slowly resumed production at its Puget Sound facility in Washington, with new measures to keep workers six-feet apart along with health checks and hand-washing stations.
A spokesman for the Boeing, which is due to begin negotiations with the government over federal aid, said the company is offering "voluntary layoff" programs, but did not confirm the size of the planned reductions.
Workers who take Boeing's voluntary layoff offer would receive a pay and benefits package as part of the program that "aims to help reduce the size of our workforce through voluntary actions and, importantly, minimize future workforce actions," the spokesman said.
The government aid is conditional on companies agreeing not to lay off workers once they have received taxpayer dollars.
Around $17 billion aimed at Boeing was included in the giant federal relief bill approved in late March.
The company, already under strain amid the controversy surrounding the top-selling 737 MAX and uncertainties over when the plane will return to the skies, has suffered a wave of order cancelations from airlines struggling to survive with air travel ground to a halt.
The spokesman said "there is no doubt the aviation industry will look very different as we eventually recover from this pandemic."
Boeing may also replace the executive in charge of the MAX program in announcements that could come as soon as Wednesday but might be delayed until the company releases quarterly results April 29, the sources said.