The cuts come even as Boeing has booked record orders for its jets and is increasing production of its single-aisle and twin-aisle aircraft. But the company has been losing market share to rival Airbus Group SE.
Boeing’s commercial unit expects to cut about 2,400 positions by attrition and around 1,600 through voluntary layoffs, a company spokesman said. This includes the culling of “hundreds” of managers and executives, some through involuntary layoffs.
The company will also reduce its flight testing unit, which is part of a separate unit, by about 10% of the approximately 5,700 positions, a company spokeswoman said.
The reductions will reduce Boeing’s workforce, which stood at 161,000 people at Dec. 31, by about 2.8%, Boeing has already cut 1,200 from its commercial jet unit this year, and the additional reductions total about 5% of its 82,000-person commercial business. Most of these people are based in Washington state.
Boeing is seeking to calm investor nerves over falling jet prices that could dent profits. The company also faces pressure to deliver on its closely watched cash flow pledges as it tries to recover nearly $30 billion in deferred costs that were accumulated building the 787 Dreamliner.
A company spokesman said any involuntary layoffs of unionized staff “would only be used as a last resort.”
Boeing’s commercial unit chief executive, Ray Conner, said last month during a companywide webcast that it was under increasing pressure from airlines to offer less-expensive jetliners, and was having to offer steep price cuts to win deals. Mr. Conner this month said Boeing was reorganizing its commercial unit by consolidating its older 747 and 767 jet programs..
“We need enough flexibility to win critical campaigns and still have enough margin to invest in new airplanes and services,” Mr. Conner said in an internal message to employees last week.
The spokesman said the company has a dollar-based target for its cost reductions, and is also focusing on improving productivity, manufacturing quality, reducing inventory and cutting back significantly on business travel.