Boeing to lay off up to 30,000

Mulally called the layoffs a "tremendous, sad thing."

SEATTLE, Washington (CNN) -- The Boeing Co. announced Tuesday night it planned to reduce its workforce at its commercial aircraft division by 20,000 to 30,000 workers by the end of 2002.

Alan Mulally, president and CEO of Boeing Commercial Airplanes, said the company must quickly "resize the company" because of the economic slowdown and a drop in demand for airplanes.

He said called the layoffs a "tremendous, sad thing."

"We were on a very positive track and this is just a sad thing for all of us," Mulally said.

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Boeing is the latest company to announce layoffs since September 11, when terrorists hijacked four Boeing-made aircraft belonging to two different airlines.

Two of the planes crashed into the World Trade Center, one into the Pentagon and another into a field in Pennsylvania.

Boeing's U.S. customers -- the country's major airlines -- have predicted bankruptcy if they don't get federal help to defray the losses they incurred during the shutdown following the attacks.

Orders for new planes have dropped from about 530 to 400, Mulally said in a news conference.

"We are very concerned, like the airlines, about their financial viability right now, cause if they, the airlines, don't stay financially viable, then we have an even bigger problem," he said.

Layoffs will begin in the next two months, he said. The action will also include some early retirements or voluntary terminations.

Mulally said the company is in "intense talks" with the FAA and other government agencies to improve transport safety and security.

Boeing now employs 93,700 workers at its commercial aircraft division in the United States. In the past five years the company has sought to aggressively diversify into military and space-related businesses.

Mulally said the estimate of 30,000 jobs is "pretty firm" but could be less if the economy and demand for air travel pick up.

I'm hopeful, like all of us, that this will come back quickly," he said. Boeing recently moved its world headquarters from Seattle to Chicago, Illinois.

-- CNNfn Correspondent Casey Wian contributed to this report.