Boeing said it will cut its workforce by 10 percent and reduce its 787 Dreamliner production in an effort to stem its bleeding in an industry laid low by the coronavirus pandemic.

In a conference call with investors early Wednesday, Boeing CEO Dave Calhoun said it would take two or three years for travel demand to recover to 2019 levels and that the company would make deeper cuts, possibly around 15 percent, in the commercial airplanes and services portions of its company. The company employs about 160,000 people.

The company also plans to reduce the output of its wide-body 787 Dreamliner from 14 per month to 10 per month this year and seven each month by 2022. He said there’s less demand for the aircraft because of the steep decline in international travel.

“We will be a smaller company for a while,” he said.

His comments to investors came after the company posted a $641 million loss in the first quarter.

[Washington state Democrats press reluctant Boeing to take federal loans]

In a letter to employees Wednesday, Calhoun said the pandemic has delivered “a body blow” to Boeing, with airlines delaying purchases for new jets, halting planned deliveries and deferring elective maintenance. 

“The aviation industry will take years to return to the levels of traffic we saw just a few months ago,” Calhoun wrote. “We have to prepare for that.”

The company already faced troubles stemming from the troubled 737 Max, which it grounded last March after two separate accidents in Ethiopia and Indonesia involving the aircraft killed 346. 

[jwp-video n=”1″]

The Wall Street Journal reported Tuesday that federal prosecutors and regulators are investigating allegations that workers left behind debris such as tools and rags in about half of the Max jets the company inspected starting in November. The Journal reported that the Federal Aviation Administration is considering whether to propose a multimillion-dollar fine against Boeing because of the debris issue. Boeing responded that the discovery of the debris “led to a robust internal investigation and immediate corrective actions in our production system, which we have also implemented across all of our commercial airplane programs.”

Despite that, Calhoun told investors he still hopes to return the Max to service by the third quarter. The company currently is storing 450 Max aircraft.

In a call with the media, Calhoun, who vowed to beef up safety when he assumed his role on Dec. 23, said he was “actually quite pleased with the company’s renewed approach to the reporting of safety issues and the prioritization of how we deal with them. I have no intention of revisiting the past,” he said, adding that the pandemic has not altered the company’s focus on safety.

A roughly $2 trillion coronavirus spending bill that passed Congress in late March included $17 billion in loans widely believed to be designated for Boeing. But Boeing would have to offer equity in order to accept the loans, a prospect Calhoun has been publicly ambivalent about. 

Still, he wrote in his letter, “we’re exploring potential government funding options and advocating for access to credit for the entire aerospace manufacturing supply chain.”

Boeing is considered the hub of the U.S. aerospace industry, which overall includes 2.5 million jobs and 17,000 suppliers.

In his call, Calhoun would not commit to taking the federal money, saying he thought the company might get the necessary liquidity without taking the government loan.

Greg Smith, the company’s CFO, said since Congress passed the roughly $2 trillion spending bill, “credit markets have certainly improved significantly.” 

“We’ve never been against accessing anything the government might put in place,” said Calhoun. “We’re simply going to be evaluating the options.”