Boeing cuts 4,000 jobs as Airbus raises stakes

Boeing plans to cut about 4,000 jobs from its commercial airplanes division by mid-year as part of a broader effort to reduce costs amid fierce competition from Airbus Group.

The US plane maker doesn’t plan any involuntary layoffs, for now.

Rather, the savings will come from 1,600 workers who elected to leave the company under a voluntary programme announced last month, Marc Birtel, a Boeing spokesman, said.

Another 2,400 positions are either vacant or will be shed through attrition.

The commercial airplane division, which accounted for 68% of Boeing’s 2015 profit, is also flattening its management structure to create a “more streamlined and nimble organisation that can respond to marketplace demands,” he said.

The effort to revamp Boeing’s sprawling commercial jetliner manufacturing unit comes as new chief executive officer Dennis Muilenburg starts to make his mark at Boeing.

Mr Muilenburg used cost-cutting measures to bolster profits in an era of constrained defense spending in a previous role as chief of Boeing’s defense unit.

The company is also looking beyond labour for savings.

Boeing is renegotiating supplier contracts, consolidating programmes, slashing business travel and working to boost productivity, quality and reduce excess inventory, Mr Birtel said.

The number of job cuts could ultimately be affected by the success of those initiatives.

The planemaker earned record revenue of $96.1 billion (€85.7bn) in 2015.

It delivered 762 commercial planes, the most in its history.

However, its adjusted profit fell 13% to $7.74bn from a year earlier.

Contributing to the decline: Accounting losses related to the development of KC-46 tanker and declining 747 programmes.

Analysts had expected aircraft deliveries to rise from a record 762 in 2015.

In January, Boeing, however, indicated it would hand over about 20 fewer jets due to production changes for its largest and smallest aircraft.

The forecast reflects internal production issues at Boeing and not broader pressures on the aerospace sector, Mr Muilenburg said then.

Aircraft deliveries should taper to between 740 and 745 jetliners this year as Boeing halves output of its iconic humpbacked jumbo jet.

The plane maker begins manufacturing a new version of the 737, its best-selling and most profitable jetliner.

The first 737 Max jets will be assembled at a slower pace this year.

That should still bolster delivery totals in 2017.

That is when the new model is slated to make its commercial debut, according to Boeing.