Once-thriving company is working hard to cope with problems. Boeing was struggling to deal with challenges even before the coronavirus pandemic. The company is already shedding 16,000 jobs but this is not the end of the story as the company plans to further reduce the number of employees. It is hard to blame this world-famous company as the coronavirus pandemic affected the demand for aircraft.
Interestingly, Boeing’s third-quarter results surpassed expectations. However, the results show the company’s struggles in the pandemic. It is worth mentioning that, the company is looking to further reduce costs. It makes sense as Boeing is trying to cope with the prolonged impact of the pandemic.
People should take into account that, a net loss in the third quarter reached $466 million from a profit of $1.2 billion a year earlier. Notably, that was on sales of $14 billion, down 29% from a year ago. However, this result exceeded expectations.
Importantly, the company suffered the biggest losses, in the commercial aircraft unit, as the revenue fell 56% in the first quarter of 2019. This year compared with the same quarter last year, sales dropped from $8.2 billion to $3.6 billion.
Boeing and plans for the future
According to Boeing’s CEO Dave Calhoun, the company aims to have a staff of 130,000 by the end of next year. As a reminder, earlier this year, the plane-maker targeted a 10% cut to its staff. At the beginning of the year, 160,000 people used to work for the company.
Unfortunately, about 19,000 employees are leaving the company in 2020. However, Boeing is adding some jobs in the more stable defense unit.
The company’s airline customers are doing whatever they can to save cash and predict a recovery in air travel to 2019 is years away. In this situation, it is not surprising that the company losing orders. Importantly, in the first nine months of the year, Boeing lost a net 381 orders for new planes.
It is worth noting that, the company reduced production rates and targets due to low demand. Interestingly, earlier this month, the company made an important decision. The planemaker decided to consolidate the production of its 787 Dreamliner at a single facility in South Carolina.
Importantly, the problems with the company best-selling Boeing 737 Max slowly but steadily comes to an end. However, it won’t be easy to solve all issues even when 737 Max will return to commercial service.