Boeing to cut staff by 10% after reporting $641 million loss

Boeing reported a loss of $641 million in the first quarter Wednesday. The aerospace manufacturer also announced it would cut 16,000 employees—10% of its staff.

The firm’s 737-MAX woes had already forced production to slow, but the collapse of global air travel amid the pandemic has further reduced its orders. The company’s revenue fell 26% in the first quarter to $16.9 billion. The firm also announced plans to scale back production of the 787 Dreamliner and the 777.

Boeing reported burning through $4.3 billion in cash during the first quarter. And the company’s total consolidated debt climbed 42% to $38.9 billion from last quarter.

“Access to additional liquidity will be critical for Boeing and the aerospace manufacturing sector to bridge to recovery, and the company is actively exploring all of the available options. Boeing believes it will be able to obtain sufficient liquidity to fund its operations,” the company wrote in its first-quarter earnings report.

Boeing could still be the benefactor of a federal bailout. The stimulus package passed in March set aside $17 billion in economic relief aimed at Boeing.

A Barclays report published on March 30 points to Airbus coming out of the crisis “much better” than Boeing because of a higher backlog of orders and a stronger balance sheet, among other reasons.

The big question for Boeing and U.S. aerospace travel return? The Barclays report said it’s “virtually impossible to predict how much global traffic will decline in 2020 and potentially recover in 2021.”

Once governments do start to ease shutdowns, citizens might balk at jumping right back on planes. A Fortune-SurveyMonkey poll conducted in mid-April found 71% of U.S. adults wouldn’t consider flying until at least four months from now. And 43% of frequent flyers said the same.

Boeing, which is the backbone of the entire U.S. aerospace industry, and its struggle to rebound will have long-term impacts for its massive network of suppliers like engine maker GE Aviation.

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.

More must-read stories from Fortune:

—What the law says about forcing employees back to the office
A.I. will be crucial to non-tech companies—and they need a new playbook for it
Which companies’ stocks will thrive after the coronavirus crash?
Everything you need to know about furloughs and what they mean for workers
—What to know if your small business is applying for Round 2 PPP loans from the SBA
—PODCAST: How 2 CEOs outside of health care decided to pivot to fight COVID-19
—WATCH: Why the banks were ready for the financial impact of coronavirus

Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.

Read More

CryptocurrencyInvestingBanksReal Estate