Boeing to Cut 4,500 Jobs (Update)

The job cuts will bring Boeing Commercial Airplanes employment to approximately 63,500, similar to its level at the start of 2008. Boeing said an unspecified number of layoffs will occur, in addition to normal attrition and a reduction in contract labor. Employment reached 68,000 by the end of 2008.

"We are taking prudent actions to make sure Boeing remains well positioned in today's difficult economic environment," Carson said. "We believe that acting now will allow us to be in a financial position to adapt to market uncertainties, meet our customer commitments, continue investing in our current and future product lines, and protect our competitiveness in a fiercely competitive business environment."

On Thursday, Boeing reported that it captured 662 net commercial airplane orders in 2008, down from a record 1,413 orders in 2007. Rival Airbus has reported 878 orders through November, assuring that it will lead Boeing in orders for the first time since 2005.

Meanwhile, Boeing said it delivered 375 aircraft in 2008, down from 441 in 2007, largely as a result of a two-month strike by the International Association of Machinists. Macquarie Research forecasts 450 aircraft deliveries in 2009 and 426 deliveries in 2010.

In a recent report, Macquarie Research analyst Rob Stallard said the strike and various production problems made 2008 an "annus horribilis" In 2009, he said, Boeing still faces problems "due to deteriorating aerospace fundamentals and 787 development risk.

"On the plus side, we think much of the bad news is reflected in the lowly valuation," Stallard wrote, while Boeing's defense division "is likely to remain a solid EPS contributor through the downturn." He rates the stock outperform, with a target price of $51.