Boeing (BA) - Get Report on Thursday announced voluntary buyout offers for its 161,000 employees as the embattled airplane maker continues to grapple with the fallout of the coronavirus pandemic on air travel, and the prospect of a long-term halt on new-plane orders.
In a statement, Boeing CEO Dave Calhoun said the company will commence with a voluntary layoff (VLO) plan "... that allows eligible employees who want to exit the company to do so with a pay and benefits package."
"When the world emerges from the pandemic, the size of the commercial market and the types of products and services our customers want and need will likely be different," Calhoun said. "We will need to balance the supply and demand accordingly as the industry goes through the recovery process for years to come.
"It's important we start adjusting to our new reality now," the CEO added.
Already reeling from a prolonged grounding of its 737 MAX following two fatal crashes, Boeing and rival Airbus now face a demand tailspin as both domestic and international carriers pare back their schedules and park hundreds of existing jets.
About 44% of the global aircraft fleet is in storage, according to an estimate by Cirium quoted by Bloomberg.
Wide-body jetliner production could tumble by 60% over the next three years, Jeffries analyst Sheila Kahyaoglu wrote in a research note to clients this week.
That could shrink even more if President Donald Trump moves forward with grounding all domestic U.S. flights - something he is pondering as an additional measure to keep people hunkered down in a further attempt to curb the spread of the coronavirus.
“We’re certainly looking at it, but once you do that you really are ... clamping down on an industry that is desperately needed,” Trump said on Wednesday. “That’s a calculation that we’re looking at ... We’re looking at it very strongly.”
Shares of Boeing were down 1.06% at $129.97 in trading on Thursday. The stock ended the trading day Wednesday down 12.36% at $130.70.