Boeing's commercial jets unit to cut jobs in 2017

SEATTLE, Dec 19 (Reuters) - Boeing Co's commercial airplanes unit said on Monday it would cut more jobs in 2017 after slashing the workforce by 8 percent in 2016 as it battles to sell planes.

The job cuts come as Boeing and rival Airbus face slowing demand for new aircraft, particularly twin-aisle jetliners such as the Boeing 777 and Airbus A330.

Boeing said last week that it would cut 777 production to five a month in August 2017, a 40 percent reduction from the current rate of 8.3 a month, because of slow sales.

Boeing did not say how many job it will cut next year, noting it is still finalizing its 2017 budget and employment needs.

But the announcement shows the world's biggest plane maker is cutting jobs more aggressively than it forecast earlier this year, and that the pressure will not abate under new airplanes Chief Executive Kevin McAllister, who succeeded Ray Conner on Nov. 21. Conner is now vice chairman.

"To successfully compete and win new orders that will fund future product development and growth requires us to achieve much better performance," Conner and McAllister said in a memo to Boeing Commercial Airplane employees on Monday.

Boeing "will need to do more in 2017" to lower costs and make its planes more affordable, the memo said.

Boeing shares were up 1.1 percent at $156.19.

For 2016, Boeing said it expects job reductions to total 8 percent of the commercial airplanes workforce, including a 10 percent reduction in the ranks of executives and managers.

The unit cut 6,115 jobs, or 7.3 percent, through November compared with the tally on Dec. 31, 2015, according to Boeing's employment data. That suggests a further 565 job reductions in 2016, and more next year. In March, the company said it planned to cut about 4,000 jobs at the unit.

The company is offering a voluntary layoff program in early 2017, according to Monday's memo, which added that involuntary layoffs may occur in some cases. A spokesman said employees participating in the voluntary layoff program will receive a lump sum payment of one week's pay for each year served, for a maximum of 26 weeks. (Additional reporting by Anya George Tharakan in Bengaluru; Editing by Saumyadeb Chakrabarty and Tom Brown)


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NTP: Views from the cockpit of a Boeing 737-800
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NTP: Views from the cockpit of a Boeing 737-800
CAPE TOWN, SOUTH AFRICA - AUGUST 20 (SOUTH AFRICA OUT): A view from the cockpit of a Mango Airlines Boeing 737-800 with captain Lourens Sadler and co-pilot, first officer Mohau Tlhapuletsa during a flight from Cape Town to Lanseria and back on August 20, 2015 in South Africa. The low cost airline Mango is expanding its Lanseria operations with a new route to Durban and an additional early morning flight from Cape Town to Lanseria. The airline said in a press release that the new route and schedule would come into effective on 15 October, with flights on sale from across all distribution channels. The new Lanseria Durban route will see Mango operate an initial twice-daily service in the mornings and late afternoons while a fourth early morning frequency between Cape Town and Lanseria has been added. (Photo by Nardus Engelbrecht/Gallo Images/Getty Images)
CAPE TOWN, SOUTH AFRICA - AUGUST 20 (SOUTH AFRICA OUT): A view from the cockpit of a Mango Airlines Boeing 737-800 with captain Lourens Sadler and co-pilot, first officer Mohau Tlhapuletsa during a flight from Cape Town to Lanseria and back on August 20, 2015 in South Africa. The low cost airline Mango is expanding its Lanseria operations with a new route to Durban and an additional early morning flight from Cape Town to Lanseria. The airline said in a press release that the new route and schedule would come into effective on 15 October, with flights on sale from across all distribution channels. The new Lanseria Durban route will see Mango operate an initial twice-daily service in the mornings and late afternoons while a fourth early morning frequency between Cape Town and Lanseria has been added. (Photo by Nardus Engelbrecht/Gallo Images/Getty Images)
CAPE TOWN, SOUTH AFRICA - AUGUST 20 (SOUTH AFRICA OUT): A view from the cockpit of a Mango Airlines Boeing 737-800 with captain Lourens Sadler and co-pilot, first officer Mohau Tlhapuletsa during a flight from Cape Town to Lanseria and back on August 20, 2015 in South Africa. The low cost airline Mango is expanding its Lanseria operations with a new route to Durban and an additional early morning flight from Cape Town to Lanseria. The airline said in a press release that the new route and schedule would come into effective on 15 October, with flights on sale from across all distribution channels. The new Lanseria Durban route will see Mango operate an initial twice-daily service in the mornings and late afternoons while a fourth early morning frequency between Cape Town and Lanseria has been added. (Photo by Nardus Engelbrecht/Gallo Images/Getty Images)
CAPE TOWN, SOUTH AFRICA - AUGUST 20 (SOUTH AFRICA OUT): A view of Lion's Head from the cockpit of a Mango Airlines Boeing 737-800 with captain Lourens Sadler and co-pilot, first officer Mohau Tlhapuletsa during a flight from Cape Town to Lanseria and back on August 20, 2015 in South Africa. The low cost airline Mango is expanding its Lanseria operations with a new route to Durban and an additional early morning flight from Cape Town to Lanseria. The airline said in a press release that the new route and schedule would come into effective on 15 October, with flights on sale from across all distribution channels. The new Lanseria Durban route will see Mango operate an initial twice-daily service in the mornings and late afternoons while a fourth early morning frequency between Cape Town and Lanseria has been added. (Photo by Nardus Engelbrecht/Gallo Images/Getty Images)
CAPE TOWN, SOUTH AFRICA - AUGUST 20 (SOUTH AFRICA OUT): A view of Table Mountain from the cockpit of a Mango Airlines Boeing 737-800 with captain Lourens Sadler and co-pilot, first officer Mohau Tlhapuletsa during a flight from Cape Town to Lanseria and back on August 20, 2015 in South Africa. The low cost airline Mango is expanding its Lanseria operations with a new route to Durban and an additional early morning flight from Cape Town to Lanseria. The airline said in a press release that the new route and schedule would come into effective on 15 October, with flights on sale from across all distribution channels. The new Lanseria Durban route will see Mango operate an initial twice-daily service in the mornings and late afternoons while a fourth early morning frequency between Cape Town and Lanseria has been added. (Photo by Nardus Engelbrecht/Gallo Images/Getty Images)
CAPE TOWN, SOUTH AFRICA - AUGUST 20 (SOUTH AFRICA OUT): A view of Robben Island from the cockpit of a Mango Airlines Boeing 737-800 with captain Lourens Sadler and co-pilot, first officer Mohau Tlhapuletsa during a flight from Cape Town to Lanseria and back on August 20, 2015 in South Africa. The low cost airline Mango is expanding its Lanseria operations with a new route to Durban and an additional early morning flight from Cape Town to Lanseria. The airline said in a press release that the new route and schedule would come into effective on 15 October, with flights on sale from across all distribution channels. The new Lanseria Durban route will see Mango operate an initial twice-daily service in the mornings and late afternoons while a fourth early morning frequency between Cape Town and Lanseria has been added. (Photo by Nardus Engelbrecht/Gallo Images/Getty Images)
CAPE TOWN, SOUTH AFRICA - AUGUST 20 (SOUTH AFRICA OUT): A view from the cockpit of a Mango Airlines Boeing 737-800 with captain Lourens Sadler and co-pilot, first officer Mohau Tlhapuletsa during a flight from Cape Town to Lanseria and back on August 20, 2015 in South Africa. The low cost airline Mango is expanding its Lanseria operations with a new route to Durban and an additional early morning flight from Cape Town to Lanseria. The airline said in a press release that the new route and schedule would come into effective on 15 October, with flights on sale from across all distribution channels. The new Lanseria Durban route will see Mango operate an initial twice-daily service in the mornings and late afternoons while a fourth early morning frequency between Cape Town and Lanseria has been added. (Photo by Nardus Engelbrecht/Gallo Images/Getty Images)
CAPE TOWN, SOUTH AFRICA - AUGUST 20 (SOUTH AFRICA OUT): A view of the top of Table Mountain from the cockpit of a Mango Airlines Boeing 737-800 with captain Lourens Sadler and co-pilot, first officer Mohau Tlhapuletsa during a flight from Cape Town to Lanseria and back on August 20, 2015 in South Africa. The low cost airline Mango is expanding its Lanseria operations with a new route to Durban and an additional early morning flight from Cape Town to Lanseria. The airline said in a press release that the new route and schedule would come into effective on 15 October, with flights on sale from across all distribution channels. The new Lanseria Durban route will see Mango operate an initial twice-daily service in the mornings and late afternoons while a fourth early morning frequency between Cape Town and Lanseria has been added. (Photo by Nardus Engelbrecht/Gallo Images/Getty Images)
CAPE TOWN, SOUTH AFRICA - AUGUST 20 (SOUTH AFRICA OUT): A view from the cockpit of a Mango Airlines Boeing 737-800 with captain Lourens Sadler and co-pilot, first officer Mohau Tlhapuletsa during a flight from Cape Town to Lanseria and back on August 20, 2015 in South Africa. The low cost airline Mango is expanding its Lanseria operations with a new route to Durban and an additional early morning flight from Cape Town to Lanseria. The airline said in a press release that the new route and schedule would come into effective on 15 October, with flights on sale from across all distribution channels. The new Lanseria Durban route will see Mango operate an initial twice-daily service in the mornings and late afternoons while a fourth early morning frequency between Cape Town and Lanseria has been added. (Photo by Nardus Engelbrecht/Gallo Images/Getty Images)
CAPE TOWN, SOUTH AFRICA - AUGUST 20 (SOUTH AFRICA OUT): A view of Table Mountain from the cockpit of a Mango Airlines Boeing 737-800 with captain Lourens Sadler and co-pilot, first officer Mohau Tlhapuletsa during a flight from Cape Town to Lanseria and back on August 20, 2015 in South Africa. The low cost airline Mango is expanding its Lanseria operations with a new route to Durban and an additional early morning flight from Cape Town to Lanseria. The airline said in a press release that the new route and schedule would come into effective on 15 October, with flights on sale from across all distribution channels. The new Lanseria Durban route will see Mango operate an initial twice-daily service in the mornings and late afternoons while a fourth early morning frequency between Cape Town and Lanseria has been added. (Photo by Nardus Engelbrecht/Gallo Images/Getty Images)
CAPE TOWN, SOUTH AFRICA - AUGUST 20 (SOUTH AFRICA OUT): A view of Table Mountain and Lion's Head from the cockpit of a Mango Airlines Boeing 737-800 with captain Lourens Sadler and co-pilot, first officer Mohau Tlhapuletsa during a flight from Cape Town to Lanseria and back on August 20, 2015 in South Africa. The low cost airline Mango is expanding its Lanseria operations with a new route to Durban and an additional early morning flight from Cape Town to Lanseria. The airline said in a press release that the new route and schedule would come into effective on 15 October, with flights on sale from across all distribution channels. The new Lanseria Durban route will see Mango operate an initial twice-daily service in the mornings and late afternoons while a fourth early morning frequency between Cape Town and Lanseria has been added. (Photo by Nardus Engelbrecht/Gallo Images/Getty Images)
CAPE TOWN, SOUTH AFRICA - AUGUST 20 (SOUTH AFRICA OUT): A view from the cockpit of a Mango Airlines Boeing 737-800 with captain Lourens Sadler and co-pilot, first officer Mohau Tlhapuletsa during a flight from Cape Town to Lanseria and back on August 20, 2015 in South Africa. The low cost airline Mango is expanding its Lanseria operations with a new route to Durban and an additional early morning flight from Cape Town to Lanseria. The airline said in a press release that the new route and schedule would come into effective on 15 October, with flights on sale from across all distribution channels. The new Lanseria Durban route will see Mango operate an initial twice-daily service in the mornings and late afternoons while a fourth early morning frequency between Cape Town and Lanseria has been added. (Photo by Nardus Engelbrecht/Gallo Images/Getty Images)
CAPE TOWN, SOUTH AFRICA - AUGUST 20 (SOUTH AFRICA OUT): A view from the cockpit of a Mango Airlines Boeing 737-800 with captain Lourens Sadler and co-pilot, first officer Mohau Tlhapuletsa during a flight from Cape Town to Lanseria and back on August 20, 2015 in South Africa. The low cost airline Mango is expanding its Lanseria operations with a new route to Durban and an additional early morning flight from Cape Town to Lanseria. The airline said in a press release that the new route and schedule would come into effective on 15 October, with flights on sale from across all distribution channels. The new Lanseria Durban route will see Mango operate an initial twice-daily service in the mornings and late afternoons while a fourth early morning frequency between Cape Town and Lanseria has been addedape Town and Lanseria has been added. (Photo by Nardus Engelbrecht/Gallo Images/Getty Images)
CAPE TOWN, SOUTH AFRICA - AUGUST 20 (SOUTH AFRICA OUT): A view of Table Mountain from the cockpit of a Mango Airlines Boeing 737-800 with captain Lourens Sadler and co-pilot, first officer Mohau Tlhapuletsa during a flight from Cape Town to Lanseria and back on August 20, 2015 in South Africa. The low cost airline Mango is expanding its Lanseria operations with a new route to Durban and an additional early morning flight from Cape Town to Lanseria. The airline said in a press release that the new route and schedule would come into effective on 15 October, with flights on sale from across all distribution channels. The new Lanseria Durban route will see Mango operate an initial twice-daily service in the mornings and late afternoons while a fourth early morning frequency between Cape Town and Lanseria has been added. (Photo by Nardus Engelbrecht/Gallo Images/Getty Images)
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