Boeing to cut 5% of Commercial Airplanes workforce as production expansion slows

[Financial News]  

Boeing said it plans to cut 5% of the workforce in its Commercial Airplanes division on the 9th (local time). The move comes as production expansion is progressing more slowly than expected.
CNBC reported this on the 9th (local time), citing a memo sent to employees by Stephanie Pope, head of Boeing's Commercial Airplanes division.
Pope said stabilizing production of the best-selling 737 MAX remains a challenge, indirectly acknowledging the difficulty of increasing production rates to target levels.
CEO Kelly Ortberg had also told investors last month that production of the MAX models would not increase significantly until the second half of next year. He explained that wing production was progressing more slowly than expected.
In an internal memo on the 9th, Pope said, "As we adjusted our production plans and aircraft deliveries declined, we found ourselves with excess staff," adding, "Unfortunately, this means that about 5% of our workforce needs to be cut under our revised business plan." Pope added that those affected would be notified starting in December.
Boeing is targeting production of 52 aircraft a month starting in the second half of next year. CEO Ortberg said the company is currently working to bring monthly 737 MAX production to about 47 aircraft.
Layoffs typically trigger a rise in a company's share price, but Boeing shares fell that day. The decline came as the company was cutting jobs because production was falling short of expectations.
The Dow Jones Industrial Average surged 2.2% in afternoon trading, but Boeing, a component of the Dow, fell 0.6%. Only four Dow stocks declined that day, including Nvidia and Boeing.

[email protected] Song Kyung-jae Reporter