Boeing's shares dropped 5.23% as of Wednesday afternoon announcing third-quarter results and a cut of 7,000 jobs. File Photo by John Angelillo/UPI | License Photo
Oct. 28 (UPI) -- U.S. aeronautical company Boeing announced Wednesday it's slashing more than 7,000 jobs as it deals with the economic fallout of the COVID-19 pandemic and the ongoing disruptions caused by malfunctions with the 737 Max aircraft.
Boeing announced the cuts as part of its third-quarter results, which showed a net loss of $466 million, a sharp decrease from its $1.2 billion profit the same time last year. Sales were down 29% at $14.1 billion, with the biggest drop among commercial aircraft -- from $8.2 billion in 2019 to $3.6 billion in 2020.
"As we share our third-quarter financial results today, the deep impacts of COVID-19 on the commercial aviation market and our business are reflected in lower revenue, earnings and cash flow compared to this time last year," Boeing CEO Dave Calhoun said.
"As we align to market realities, our business units and functions are carefully making staffing decisions to prioritize natural attrition and stability in order to limit the impact on our people and our company. We anticipate a workforce of about 130,000 employees by the end of 2021."
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The Chicago-based company has seen a drop in new plane orders as airlines worldwide adjust to reduced travel since the start of the pandemic earlier this year.
But even before travel restrictions in response to the novel coronavirus, Boeing was dealing with the fallout of two crashes in its 737 Max within six months, which killed 346 people.
Investigators determined both flights showed problems with their maneuvering characteristics augmentation system, which affects the pitch of the aircraft. Boeing 737 Max planes were grounded worldwide in March 2019 as the company worked to fix the error.
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Calhoun said he expects federal regulators to lift the grounding on the plane after testing the newly fixed aircraft, but the pandemic delayed its return to the skies.
Boeing's shares were down 5.34% Wednesday afternoon after news of the job cuts.
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