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Boeing Lays Off 6,770 Employees; Resumes 737 MAX Production

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Amid the struggles related to Covid-19 pandemic and the grounded 737 Max jets, Boeing Co. has announced involuntary layoffs of the first 6,770 U.S. team members this week, as part of its earlier plan of 10 percent reduction in its workforce.

In a letter to the employees, Boeing President and CEO Dave Calhoun said the aerospace giant has concluded voluntary layoff program, which reportedly affected 5,520 U.S. employees.

Boeing also has resumed production of the 737 MAX at the company's Renton, Washington factory. The 737 program began building airplanes at a low rate, and will gradually ramp up production this year. The production was suspended temporarily in mid-January after it failed to get regulatory approvals for the company's best-selling jet to return to service and due to a backlog of 400 undelivered jets.

Citing the weak demand and delay in purchases of jets during the virus crisis, Boeing on April 29 had announced its plans to trim employee number by roughly 10% through a combination of voluntary layoffs, natural turnover and involuntary layoffs. The company then said deeper reductions would be there in certain areas, expecting more than 15% cut across commercial airplanes and services businesses, as well as corporate functions. Boeing has around 160,000 employees globally.

Calhoun now said the company will notify the affected employees of involuntary layoffs this week, and that the firm will provide all the support, including severance pay, COBRA health care coverage for U.S. employees and career transition services.

Boeing's international locations also are working through workforce reductions, which will be informed locally.

Calhoun said, "The COVID-19 pandemic's devastating impact on the airline industry means a deep cut in the number of commercial jets and services our customers will need over the next few years, which in turn means fewer jobs on our lines and in our offices....I wish there were some other way."

The aerospace and defense giant has been struggling to stay afloat after the grounding of the 737 Max jets by airlines worldwide in March 2019 following two deadly crashes that killed a total of 346 people.

In March this year, Boeing customers canceled 150 orders for 737 Max aircraft. In the first quarter, Boeing delivered 50 aircraft, including five 737 jets, down from 149 aircraft in the prior year.

The company in early May resumed all 787 operations at its South Carolina facility that were temporarily suspended on April 8 in response to the COVID-19 pandemic.

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