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Boeing to Cut 10% of IT Staff by Outsourcing to Dell

Boeing will outsource the majority of its IT needs to Dell, a move that will eliminate about 600 jobs at the Chicago aerospace giant.
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Boeing  (BA) - Get The Boeing Company Report will start outsourcing a significant amount of its information technology work to Dell Technologies  (DELL) - Get Dell Technologies Inc. Class C Report, a move that will eliminate 600 jobs at the Chicago aerospace giant. 

The eliminated jobs represent about 10% of Boeing's IT staff, according to a message that Susan Doniz, Boeing's vice president for IT and data analytics, sent to employees, according to the Seattle Times. 

Most of the affected employees are not unionized, Doniz said. They must find different work within the company, apply to work for Dell, or be laid off. 

Boeing shares at last check were up 2.1% to $211.69. Dell traded up 1.3% at $78.76. 

Boeing eliminated 20,000 jobs companywide last year and said it has plans to reduce headcount by another 11,000 this year. 

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“This is a change we would have made even without a global pandemic,” Doniz said, according to the Seattle Times. She also said the coronavirus pandemic "certainly quickened our pace."

The company did not specify where most of the layoffs would be initiated, but the Seattle Times suggested the biggest layoffs could come at major Boeing offices in the Puget Sound region, St. Louis and Charleston, S.C. 

Last week, Boeing was double-upgraded to overweight from underweight at Morgan Stanley, with analyst Kristine Liwag calling the Chicago aerospace giant "a covid-19 recovery play with upside."

She lifted her share-price target to $230 from $165. 

Boeing got all the bad news out in its “kitchen sink” earnings report in January, sending earnings estimates down and providing a “clear runway for Boeing” stock, Liwag said.