Boeing will cut 787 Dreamliner output by half and announce job cuts in its first-quarter earnings report, according to Bloomberg.
Details of the production changes for Boeing’s commercial line-up are still being finalised but they will determine the number of jobs cut.
The planemaker plans to lower the Dreamliner’s monthly output, which began the year at 14 jets, to a single-digit rate.
Chief executive Dave Calhoun previously hinted that painful measures would be needed when he warned employees last month of a “new reality” caused by coronavirus.
Global airline sales are expected to fall by $314 billion this year and the world of travel is expected to recover slowly as the crisis moves on with no end in sight.
Boeing is also still reeling from the added pressure of its 737 MAX fleet being grounded and orders postponed as regulators continue efforts to get the aircraft approved for travel after crashes in Indonesia and Ethiopia.
The process of regulators has also been slowed by the added effects of COVID-19 as they attempt to complete tasks with limited staff with much less contact.
“Boeing is facing essentially a self-made problem on the MAX and an act of God on the virus,” said Robert Spingarn, an analyst with Credit Suisse Group AG speaking with Bloomberg. “These two things together create just an unbelievably difficult situation to have to manage through.”
A spokesman for Boeing declined to comment to Bloomberg beyond referring to Calhoun’s recent remarks.
Boeing stock fell 1 per cent to $136.31 after the close of regular trading in New York. The shares have tumbled 58 per cent this year, the biggest drop on the Dow Jones Industrial Average.
