Boeing lost less money than expected in the third quarter but said it would cut more jobs as it struggles to cope with reduced demand for its planes amid the COVID-19 pandemic.
After reporting a third-quarter net loss of $466 million — from a profit of $1.2 billion a year earlier — Boeing said another 7,000 workers would lose their jobs as part of an effort to shrink its workforce to 130,000 by the end of 2021.
Before the pandemic, the company, which previously announced job cuts in April and July, employed 160,000 people.
“The global pandemic continued to add pressure to our business this quarter, and we’re aligning to this new reality by closely managing our liquidity and transforming our enterprise to be sharper, more resilient and more sustainable for the long term,” CEO Dave Calhoun said in a news release.
For the third quarter, Boeing’s revenue dropped 29% to $14.1 billion as customers continued to cancel or defer aircraft orders and the company’s 737 Max planes remained grounded after two fatal crashes killed 346 people.
Wall Street analysts had predicted $13.8 billion in revenue. On an adjusted basis, Boeing’s loss of $1.39 per share — its fourth consecutive quarterly shortfall — beat estimates of $2.52 per share.
The sales decline was most pronounced in the commercial aircraft unit where revenue fell 56% from $8.2 billion to $3.6 billion. “The global aerospace industry has recorded it worst ever quarter, with record low orders as airlines have tried to delay or renegotiate new planes in an attempt to save money,” The Guardian said.
In the first nine months of 2020, Boeing lost a net 381 orders for new planes and, according to its own estimates, the pandemic could diminish industry demand for the next decade.
Calhoun said in a message to employees that the company had “made important progress with global regulators” to certify the 737 Max as airworthy. As part of the certification process, the aircraft has completed around 1,400 test and check flights and flown more than 3,000 flight hours.