Boeing to Lay Off 1,700, May Cut 5,000 Jobs by Year-End

SEATTLE —  Facing a sharp downturn in its defense business, Boeing Co. said Thursday that it will lay off about 1,700 hourly employees this week and cut up to 5,000, or 3% of its work force, by year-end.

Seattle-based Boeing, which employed about 164,600 people worldwide at the end of 1989, cited the likelihood of lower defense spending in coming years. The company is one of the 10 biggest U.S. defense contractors, as well the world’s largest manufacturer of commercial airplanes.

The company said another reason for the reductions was that a new, larger version of its 767 twin-jet aircraft, dubbed the 777, is not yet off the ground.

The company has said an official launch of the plane, which is in development and will carry 300 to 400 passengers, depends on winning enough orders from airlines.

It said it will continue to revise its work force throughout the year because federal defense spending for the next fiscal year, which starts in October, is not yet clear.

Boeing’s employment rolls have swollen the last two years as it has won large aircraft orders from domestic and overseas airlines. Its backlog totals about $85 billion, a Boeing spokesman said, and most of that is for commercial jetliners.

After the initial 1,700 jobs are cut, the rest of the reductions will be achieved through layoffs and attrition, Boeing said. It said in December that it would reduce its work force this year but did not say by how much.

The reductions come after Boeing endured a 45-day strike by about 58,000 machinists who returned to work late in November. The workers were complaining about the form of bonus payments, excessive overtime and other problems.

The company said most of the 5,000 job cuts could be in Washington, where it employs about 106,000.

Boeing’s U.S. employment stood at 145,200 at the end of 1989. The rest of its employees work at subsidiaries overseas.

The 1,700 workers will be issued layoff notices today, but some will continue working through April.