Boeing Co. (BA:US) said it will reduce its engineering workforce by as many as 1,700 positions this year, adding to cuts of as many as 2,300 machinists, amid a gap in work on new plane models.
Some of the engineering cuts will be mitigated through attrition and a reduction in contract labor, Mike Delaney, vice president of engineering for Boeing Commercial Airplanes, said in an e-mail to managers today. Layoff notices will be sent to about 100 engineers in the Seattle area tomorrow, and about 700 will lose their jobs in 2013, he wrote.
The cuts are necessary because development is winding down on programs such as the 747-8 jumbo jet and the 787-9 Dreamliner while Boeing’s board hasn’t approved work on the 777-X and 787-10, Delaney wrote.
“Completion of non-recurring development work on the 747-8, 787-9 and the KC-46 Tanker will result in lower overall engineering employment requirements,” he wrote. Starting on the upgraded 777 and the 787-10 Dreamliner “might have provided opportunities to avoid these layoffs.”
The engineer pullback builds on a plan announced in March to dismiss about 800 machinists this year, part of a reduction of as many as 2,300 of those jobs with fewer post-assembly fixes needed on the 747-8 and the 787. Those two planes are Chicago- based Boeing’s newest models.
Companywide employment will be unchanged or slightly lower this year, Doug Alder, a spokesman at Boeing’s commercial headquarters in Seattle, reiterated today. Boeing employs about 174,000 people worldwide, including more than 86,000 in the Seattle area. The company has also been making cuts in its defense programs amid lower Pentagon spending.
The planemaker still plans to hire in some areas as completes a four-year effort to boost output more than 60 percent through 2014, with increases still to come on single- aisle 737 and the 787.
Boeing fell 0.9 percent to $85.90 at 2:46 p.m. in New York, joining a retreat by major U.S. stock indexes. The shares rose 15 percent this year through yesterday.
To contact the reporter on this story: Susanna Ray in Seattle at email@example.com
To contact the editor responsible for this story: Ed Dufner at firstname.lastname@example.org