The world's No. 2 plane maker joins Alcoa Inc, Caterpillar Inc, Chrysler LLC, 3M Co and others in shedding jobs to counter a drop in demand.

The US economy lost more than 500,000 non-farm jobs in December alone, according to the government's latest figures, and unemployment is now at a nearly 16-year high.

Boeing, which lost the race for orders against EADS unit Airbus last year, said normal attrition and a reduction in contract labour would account for some of the job losses, but layoffs would also be necessary.

Most of the jobs are overhead functions and not directly associated with plane manufacturing, Boeing said. The jobs will chiefly be cut from Boeing's massive Seattle-area plants, between April and June.

"This is another painful reminder that the recession is hitting home for Washington state families," said Washington Democrat Sen. Patty Murray, in a statement. "Boeing is part of the lifeblood of our region and when Boeing hurts, Washington state hurts."

The commercial plane unit will employ about 63,500 workers after the reductions, it said, about the same level as at the beginning of 2008. It employed 67,659 people at the end of last year.

Boeing, which also is the US No. 2 defense contractor, had just over 162,000 employees overall at the end of last year.

Its shares, which are down 46 percent over the past 12 months, dipped 5 cents, or 0.1 percent, to $44.74 on the New York Stock Exchange.

Orders Dipping

Boeing is looking to slim down as it begins to tackle a downturn in plane orders after an unprecedented three-year boom.

It booked 662 jetliner orders last year, a 53 percent drop from its industry record of 1,413 orders the year before, with airlines holding off on buying new planes as they witnessed a sharp drop-off in demand for flights.

Boeing has a record 3,714 planes in its backlog to deliver to customers -- more than six years of work at full production levels -- but industry analysts agree that many orders will be deferred and the company faces a drastic decline in new orders.

"We are taking prudent actions to make sure Boeing remains well positioned in today's difficult economic environment," said Scott Carson, chief executive of Boeing's commercial plane unit, in a statement.