On Monday, Boeing Commercial is reported to have revealed through a memo that it will be cutting more jobs in 2017 as the company is still facing changes.
The Boeing Company is a multinational corporation. Founded in 1916, it is headquartered in Chicago, Illinois. The multinational is specialized in the design, manufacturing, and sale of aircraft. More specifically, airplanes, satellites, rockets, and rotorcraft.
Its many areas of expertise have led to the creation of five primary divisions. Each is centered on a main market area. Boeing Commercial Airplanes or BCA is perhaps one of the best known.
Boeing Commercial also covers a wide area of expertise. It designs, markets, assembles, and sells business jets and jet airliners. BCA also offers product-related maintenance and customer training. Its services span at a global level.
BCA was formerly led by Raymond Conner. He is now the company vice-chairman. Kevin McAllister is Conner’s successor. He officially took over the CEO role on November 21, 2016. The recently named Chief Executive released a few statements on Monday.
2016 has not been the best year for Boeing Commercial. The company has been facing market difficulties. The decreasing demand for new aircraft has led to some important changes.
Twin-aisles jetliners as the Airbus A330 and Boeing 777 have reportedly marked a significant demand decline. As such, the company was forced to cut back its employee numbers.
In 2016, BCA had to renounce to an estimated 8 percent of its workforce. According to the Monday news, they will not be the only ones.
An announcement circulated Monday amongst employees announced next year’s deployments. The message was signed by both McAllister and Connor. It stated that 2017 will come with a new round of job cuts.
Specific details such as the number or percentage have yet to be offered. The message also went to explain the reason behind the cuts. Reports state that the business climate was the invoked reason.
The reported fewer sale opportunities were one of the main factors. Another important element was the tough market competition. As such, the company will need to further reduce its costs.
The employee memo also pointed out another fact. Boeing Commercial would also have to make its airplanes more affordable.
Last week, the company revealed some future plans. As such, it will be reducing the Boeing 777 production. Only five planes will be produced per month.
The decrease will come into effect starting with August 2017. It will mark a 40 percent reduction when compared to current rates. Presently, the company produces 8.3 such planes per month.
As the company memo states, the cut is a sign of the current market trend. It shows the almost regional hesitation towards the acquisition of twin-aisle aircraft.
BCA is expected to go through fundamental changes. According to the same memo, it will be trying to win its respective market. It will also be looking to fund company growth. But perhaps more importantly, it will be seeking to operate as a healthy business.
Boeing Commercial is reportedly still analyzing its 2017 budget. Staffing plans are still being worked out. The current employee memo was sent as an ahead notification. BCA stated that it will be using the same deployment system as in 2016.
As such, it will be leaving unfulfilled open positions, where appropriate. It will also be rolling out the VLO or voluntary lay-offs program. Attrition was and will also be used.
In cases and situations where it is needed, the company will also utilize involuntary layoffs.
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