Boeing warns of possible layoffs in 2009

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Boeing Co. may lay off some workers next year as part of an effort to cut costs in response to difficult market conditions and a slowing global economy, a company executive said.

In an internal memo sent to employees Thursday, Rick Stephens, senior vice president of human resources, was quoted as saying the aerospace company expects its number of employees to decline in 2009 after several years of growth.

That decline could exceed Boeing's average annual attrition rate of 4 to 5 percent, though the Chicago-based company has not made a firm estimate. It would include a mix of attrition, hiring freezes and layoffs, he said, according to the memo.

The memo was released a day after Boeing announced plans to lay off 800 of its roughly 3,000 workers at a facility in Wichita, Kan., due to the delay of a U.S. Air Force tanker replacement program and the end of other work projects.

"As evidenced by the announcement yesterday in Wichita, we do expect to see some employment decreases starting in early 2009," Stephens said. "Where reductions occur, we will do everything we can to mitigate the impact on our team through natural attrition, release of outside contract hires and job transfers within Boeing."

Parts of the company, which makes military aircraft, civilian jetliners and surveillance systems, are already taking steps to deal with the tougher business environment, such as cutting discretionary spending and reviewing staffing levels, he said.

Boeing's chief executive, Jim McNerney, was quoted as saying the company's challenges next year include delays in contract awards and completing programs, cost-cutting to fund development programs, expectations for lower defense spending, and the potential impact of a global recession on the airline industry.

"To protect the competitiveness and innovation responsible for building our record backlog - and to best serve our customers -we must respond aggressively to these business realities," he said.

Boeing, which has 3,734 aircraft on order, has seen orders peak and the number of planes in its backlog will probably decline going forward, the chief of its commercial airplanes division said Wednesday.

Boeing, the world's No. 2 commercial aircraft maker after Airbus, employed more than 164,000 people in 70 countries at the end of October. Its business is almost evenly split between its commercial aircraft and defense units.

Shares of Boeing rose 59 cents, or 1.6 percent, to $37.70 in afternoon trading.


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