Boeing Co (NYSE:BA) stated that its commercial airplanes will be taking necessary steps to remove 4,000 jobs by June. This is part of the cost cutting strategy decided by the company. The company said that around 10% of the staff will be eliminated by the end of this year.
Boeing announced that majority of the job cuts will be coming from managerial and executive level positions. The company said that the first phase of job cuts will be voluntary and through attrition.
The company announced that it plans to cut costs by the end of 2016 and jobs cuts are one of the strategies to achieve its goal. Boeing is also implementing other methods such as reducing inventory, cutting down on travel time, hiring contractors and increasing productivity through various measures. The company said that these cost cuttings will help improve its margins.
The company also stated that if it has to implement more job cuts than planned in order to reduce cost, it would do so. However, the risk involved in taking that route is that it would still need sufficient productive staff in a short period of time to match the desired production levels as that of competitors.
Boeing faced mounting expenses in fiscal 2015, with total cost increasing to $82.1 billion from $76.8 billion in fiscal 2014. If the company manages to reduce costs effectively, it is expected that the latter will be able to report better operating margins.