Boeing to reduce workforce by 20% in the face of Covid-19

Alongside its third quarter financials, the aircraft-maker said it would reduce its headcount by approximately 20% to 130,000 by the end of 2021.

"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," the company's chief executive officer, Dave Calhoun, said in a statement.

The firm did manage to beat analysts' estimates for its third quarter sales and profits.

For the three months to September, Boeing posted a 29% year-on-year drop in revenues to $14.14bn (consensus: $13.84bn), as commercial jet deliveries more than halved from 62 to 28, for an adjusted loss per share of $1.39 (consensus: $2.38).

However, it continued to bleed cash during the quarter, to the tune of -$4.82bn on an operating basis. That was worse than the $2.4bn that the company haemorrhaged over the prior three-month stretch.

Over the preceding nine months, free cash-flow had fallen by $15.4bn, against a $1.6bn drop over the comparable period of 2019.

On a more positive note, Calhoun pointed out how the company's diversified portfolio of businesses, including government services, as well as its Defence and Space programmes, continued to provide a modicum of stability.

Boeing also cited the "steady" progress made on re-certifying its crash-prone 737 MAX, having conducted certification flights with regulators in the US, Canada, Brazil and the European Union.

As part of its streamlining measures, the company was also in the process of "transforming" its infrastructure footprint, overhead and organisational structure, portfolio and investment mix and the health and operational excellence of its supply chain.

At period end, it had total cash and marketable securities of $27.1bn, down from $32.4bn a year earlier, with cash having nearly halved from $20.bn to $10.6bn.

Total consolidated debt was roughly steady at $61.0bn, a decline from the $61.4bn on its books one year before.

Commenting on the market reaction to the news from Boeing, Edward Moya, senior market analyst for Oanda in New York said: " Wall Street is fixated on the negative outlook, forget GE and Boeing’s strong earnings beats, all that stands out is the airplane maker’s 7% workforce reduction by the end of 2021.

"[...] It is a shame to see the sea of red drown out the positive news from these two industrial titans. While Boeing’s workforce reduction will resonate across the industry, the path forward is starting to look brighter."

As of 1256 GMT, shares of Boeing were off by 0.75% to $154.07.