Embattled airplane maker Boeing (BA) - Get Report is set to cut production of its 787 Dreamliner by roughly half and also announce permanent job cuts when it reports its first-quarter earnings numbers next week.
Citing people familiar with its plans, Bloomberg reported that the Chicago-based airplane maker will detail production changes to its commercial lineup, including scaling back Dreamliner production, and also announce staff layoffs and buyouts.
The scale-back in production as well as the workforce cuts come as Boeing continues to face unprecedented pressure from the coronavirus pandemic’s impact on the global airline industry and drop-off in both personal and business air travel.
Still reeling from the prolonged grounding of its 737 MAX following two fatal crashes, Boeing earlier this month announced voluntary buyout offers for its roughly 160,000 employees, which CEO David Calhoun said would help avoid “other workforce actions.”
The U.S. plane manufacturer faces added strain from maintaining 400 or so newly built 737 MAX jets that are stuck in storage until regulators lift the grounding order.
Calhoun hinted last month of a “new reality” with a far smaller jetliner market when the world emerges from the coronavirus pandemic. Global airline sales are projected to plunge by $314 billion this year, according to an industry trade group, and travel may not recover fully until mid-decade, by some estimates.
Meantime, roughly 16,700 commercial jets are currently parked, equivalent to 64% of the global fleet, according to aviation consultant Cirium.
Boeing will announce its first-quarter earnings results on April 29. Analysts polled by FactSet are expecting to the company to post a loss of $1.35 a share on sales of $17.3 billion.
Shares of Boeing were down 0.68% at $136.80 in trading on Friday. The shares have tumbled 58% this year, the biggest drop on the Dow Jones Industrial Average.