Boeing Co. is offering employees buyouts in an effort to offset the financial strain brought on by the coronavirus pandemic.
As travel dried up and airlines starting canceling routes and parking their planes, the demand for new commercial aircraft dwindled, putting one of South Carolina's largest employers in uncertain territory.
"It's important we start adjusting to our new reality now," CEO David Calhoun said in a letter to workers Thursday morning. "We want to address it through natural turnover and voluntary employment actions to the extent we responsibly can."
Eligible employees who volunteer for the layoff program will be given pay and a benefits package, Calhoun said.
Details about the layoff program and who will be eligible are not available yet. That information will go out to employees in three to four weeks, according to Calhoun's letter.
The company did not specify how many workers it expects to take the buyouts, and it's unclear how the layoffs will affect the company's about 7,000-person workforce in South Carolina.
In total, the Chicago-based aerospace giant employed more than 161,000 people at the beginning of the year. About 64,500 of them work in the commercial airplane business.
The layoff offer follows several other cost-cutting measures Boeing announced in mid-March. The company froze hiring, limited overtime and cut back on travel in an effort to conserve cash.
In his note to employees Thursday, Calhoun described the uncertainty of their current situation.
"We're in uncharted waters," Calhoun said in the memo. "We're taking actions — including offering this (voluntary layoff) plan — based on what we know today. They will bridge us to recovery as long as we're not confronted with more unexpected challenges."
Boeing is in the midst of a two-week production shutdown of its Washington state facilities that started March 25.
The company's plant in North Charleston has remained open, though employees there who are able to do their jobs from home have worked remotely for the last few weeks.
Typically, production of the 787 Dreamliner jet is split between plants in North Charleston and Everett, Wash., but during the two-week shutdown, the South Carolina site has been the only Boeing location assembling commercial aircraft.
Both Boeing and competitor Airbus may be considering a "drastic" cut in production for wide-body aircraft like the 787 due to declines in demand, Reuters reported Thursday, citing an unidentified industry source.
Boeing declined to comment on the report.
The planemaker has already announced two planned production cuts for its Dreamliner program, reducing the current rate of 14 per month to 12 and then eventually to 10.
Stan Deal, CEO of Boeing Commercial Airplanes, addressed the declining demand for airplane deliveries in an email to employees Thursday.
"We will continue to support our customers as they navigate extraordinary headwinds — and it may mean deferring airplane deliveries or other forms of assistance," Deal wrote in the memo.
Deal noted a recent forecast from the International Air Transport Association that predicts airlines will lose at least $252 billion in revenue this year because of the health crisis.
Like Calhoun's letter, Deal's message references a need to accept a new reality. Once recovery starts, Deal said, Boeing will be working with a "different-sized commercial market."